The 3 most important factors impacting board performance

Having recently completed a number of engagements undertaking governance reviews and delivering workshops for a range of state and club associations, I’ve reflected on what I believe to be the three most important factors that consistently impacted the performance of the board and ultimately the organisation.

Purpose & Strategy

The first factor was clarity around the organisation’s purpose and strategy. Often sporting associations attempt to be all things to all people, attempting to deliver programs to all segments of the community with limited resources. Strategic plans are often written as a series of tactics or initiatives rather than being clear about who is their target market, what is the unique value they bring, what is their competitive advantage and how do they sustain that value over time. Without this focus, it makes it difficult for boards to really understand what it is they’re trying to achieve along with the added challenge of creating a shared vision with members who need to be part of the strategy development process.

Roles & Responsibilities

The second most important factor was the board being clear on their roles and responsibilities. All board members bring with them a range of skills and experiences that allow them to add tremendous value to the strategic and governance responsibilities of the board. However, without the appropriate guidance and induction as to what the role of the board is, there is a tendency to drift towards the operational ‘fun’ things that they are often passionate about within their sport. An appropriate induction and ongoing support and training for board members will reinforce the following roles and responsibilities for directors:
– Strategy formulation and approval
– Setting the tone – culture, behaviours and standards.
– Ensuring appropriate risk management is in place.
– Transparency and accountability to members.
– Monitoring association progress and performance against its plans.
– Appoint the CEO / EO, performance monitoring and review.
– Ensuring compliance with Constitution, by-laws and all applicable legislation.
– Policy formulation.
– Financial control and monitoring solvency.
– Responding to issues and crisis management.
– Succession planning for the board and key positions.

Board Composition

Board composition is the third factor having the biggest impact on board performance. Having the right people around the table is critical to the effectiveness of a board, and the evolving nature of running an association and the future challenges to be faced require a range of skill sets. There is plenty of evidence to support that more diverse boards make better decisions by bringing different skills and perspectives to the decision making process and help to mitigate against group think. While there is no one-size fits all ideal structure and composition for boards, being clear on what skills the board needs and ensuring there is a diversity of board members (e.g. age, gender, skill sets, cultural and social backgrounds etc.) and being pro-active in the process to attract skilled directors is a critical element that will support the performance of the board. Boards with the ability to appoint directors to their board, those with nominations committee processes and are pro-active in sourcing directors beyond their traditional catchments have made significant improvements in attracting a range of diverse sets and experiences to their board.

While governance is multi-faceted and doing it well requires boards to think well beyond the areas discussed above, improving these three elements will go a long way to improving the performance of the board and the organisation.

Purpose Driven Performance are governance and strategy specialists across the sport and not-for-profit sector.

⏳ Governance and board reviews
💡 Strategy development and planning
👥 Board induction, education and training
📊 Program and business development