PARMI NATESAN AND PRIEUR DU PLESSIS: How to create an effective board agenda

As all South Africans now realise, good governance and strategy are vital for any organisation. Both are the purview of the board, hence growing calls for directorship to be professionalised.

Unlike executive committees or management committees that meet frequently, boards meet fairly infrequently. Their meetings thus need to be well planned to get the maximum value for the company.

Chairing skill is one important driver, but no matter how skilful or persuasive the chair may be, the meeting’s success is founded on the agenda itself. It should be considered as the score of a symphony to provide a framework that highlights each instrument and brings them all together to create something exceptional.

The board agenda is typically driven by the company secretary or equivalent, working closely with the chair and a member of the executive. However, there is consensus that the agenda is “owned” by the board as a whole, so it is recommended that all the board members have the opportunity to collaborate in the process.

Once the agenda is complete it should be sent out well in advance, with other meeting documents, so that board members know exactly what the meeting is about. When the meeting commences, the agenda should be formally adopted.

Regarding drafting the agenda there are several good pieces of advice to apply. The first is to consider the agenda not as a rote document that follows a fixed format — apologies, confirmation of minutes, matters arising and so on — but rather to approach it more strategically.

Hopefully, collaboration would have given clear direction about what the key issues are, and these are the ones that should be addressed first. Routine reports and less important items should be lower down the agenda.

Understanding industry

Each agenda item should spell out what it intends to achieve, and specifically whether a decision is required. The company secretary must also stipulate the estimated time that should be spent on each item. Routine items should be allocated as little time as possible — the real business of the meeting is to discuss the current big issues.

Creating an effective board agenda also necessitates an understanding of the broader industry and market dynamics that influence the organisation. Incorporating an analysis or discussion section in which board members can deliberate on these aspects could add significant value.

Some would argue that routine discussion points and reports can be grouped into one agenda item that can be approved in one motion. However, there is the danger that the categorisation of routine items may be used to avoid difficult discussions. Financial reports fall under the routine heading but do need careful consideration. One cannot stress enough the need for board members to read all the documents before the meeting.

An important principle in creating a good board agenda is to ensure no operational matters are listed, unless they have strategic or reputational implications. Aside from formally adopting the agenda at the beginning of the meeting, in terms of King IV each board member should be required to state if any of the agenda items present a conflict of interest.

Regarding board packs, once the perfect agenda has been developed, the information presented to the board has to support it. Getting the balance correct is difficult, but board members have the ultimate responsibility for ensuring they have the right level and quality of information, especially given that they alone are responsible for their decisions. Using board portals from which the board packs can be downloaded will help to streamline an essentially cumbersome process.

At the end of each board meeting, it is a good idea for the chair to allow a short period of discussion and reflection about what worked well, and what needs improvement, thus setting in motion a process of continuous improvement. An environment of openness and critical deliberation will assist in fostering a culture of excellence and foresight in board governance. 

Professors Natesan and Du Plessis are respectively CEO and facilitator of the Institute of Directors of SA.