Board Effectiveness: PEAK Performance Indicator (PPI)
A Board can achieve a high level of effectiveness by accentuating the presence, engagement, alignment, and knowledge of its Directors. The XCEO PEAK Performance Indicator can help the Board improve its overall success by governing the Directors individual and aggregate levels of performance.
The Board should expect each Director to consistently meet a minimum level of performance in all four areas at all times. All the more, each Director should be encouraged to excel in some areas at some time and inspired to excel in each area at all times.
PRESENCE: Directors can be present in meetings and conferences (telephonic, video, or in person) without being engaged...but Directors cannot be engaged without attending meetings and conferences.
In the context of PEAK performance, Director Presence is much more than merely being present at a meeting or conference. While all Directors need to attend meetings and conferences, the effective ones do much more.
Shareholders and stakeholders want Directors to represent their best interest at all times by participating in all meetings. Directors are expected to attend a minimum of 75% of them. In this regard, showing up on time, staying for the entire duration, and participating attentively in meetings, forms the basis for presence. This is foundational to be an effective director.
ENGAGEMENT: Being “busy” or “active” during Board meetings is not synonymous with being engaged. Any issue that is worth including in the meeting agenda is important enough to discuss thoroughly.
In the context of PEAK performance, Director Engagement is much more than merely asking tough questions during meetings. While Directors should ask tough questions, they should be constructive and appropriately challenging. Again, effective Directors do much more.
Boards that build a culture that thrives on full participation and constructive discourse are likely to have a more engaged group of Directors. The Directors are less likely to shortchange meaningful dialogue simply because the board meeting is running behind schedule. They may be encouraged to be constructively disruptive when deemed necessary to ensure issues are thoroughly discussed.
ALIGNMENT: Directors can be knowledgeable without being aligned...but Directors should not be aligned without being knowledgeable.
In the context of PEAK performance, Director Alignment is much more than simply agreeing with management and other members of the Board. While Directors need to be aligned, it must be achieved via a constructive process.
When new issues are first introduced to the Board, Directors may often hold different points of view from their colleagues. This can be influenced by the diversity of professional backgrounds, experiences and sometimes tenure. Nonetheless, through a healthy iterative process, Directors must strive to reach alignment through the Alignment Phenomenon.
KNOWLEDGE: Knowledge is the basis for effective Boardroom contribution. Enlightened Directors recognize that thorough preparation is the key to success. They know that without preparation there will be no knowledge and without knowledge they will not be able to contribute.
Some Directors will have more relevant insight and understanding, or familiarity gained from their particular experiences or associations than other members of the Board. This could be related to a specific discipline or industry. One Director could simply have obtained or has access to information not known or available to other Directors.
Even the most knowledgeable Directors should earn the support of their peers and management to share it with others. In many Boardrooms, management may not care how much a Director knows, until they know how much a Director cares.
In summary, when Boards understand and value their PEAK Performance Indicator, they are likely to improve their overall Boardroom Effectiveness and accelerate their progress toward building long-term shareholder value through “Enlightened Corporate Governance® and Extreme Personal Leadership®. The Peak Performance Indicator (PPI) is readily available and included in the XCEO, Inc. Board Evaluation and Board Succession services