Unsurprisingly, 70% of corporate errors stem from ill-organized communication. However, at the same time, organizations with good communications are 3.5 times more likely to outpace their competitors.
Whether you serve on an advisory, nonprofit or commercial organization, corporate or private board, the critical importance of the board of directors’ communication is difficult to overestimate.
In this article, we’ll discover:
- How good communication affects board decisions
- The types of communication within board of director teams
- The key challenges of the board’s work
- What practices your organization can adopt to improve communication
- What an online portal is, and how it contributes to effective board member communication
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Why effective board communication is important
Effective communication is the board’s cornerstone for developing new strategies and making important decisions. Furthermore, it fosters transparency and enhances relationships between board members and management.
If board members are not on the same page, disagreements are fraught with aggravation and additional decision-making challenges.
Fortunately, there are reliable ways to prevent potential problems or fix current obstacles with one-stop practices designed for a successful board. Keep reading to see how they can be beneficial!
Types of board communication
Proficient board leadership and functioning stand on effective board communications, which promotes accountability, transparency, and value-added interactions while staying focused on the board’s objectives.
Companies reach this through one of the following types of communication or by combining several of them:
A formal meeting is a planned meeting of two or more people organized to achieve a common goal through verbal interaction. The hallmarks of this are predefined topics, formal notices, and a set of objectives.
Participants hold official meetings on the appointed day and time following an agenda. As a rule, the chairperson conducts board meetings and keeps minutes.
|Ease of decision-making||Time-consuming process|
|Good chance to find common ground on a subject||The process is expensive to arrange|
|Each participant feels engaged||Moderating the meeting can be challenging|
An informal conversation is a type of communication that doesn’t involve formal methods or structures. For example, it may include group and private chats, comments, and notes that colleagues share outside the formal settings.
|Personal connection building between colleagues||Misinterpretation due to the absence of official processes|
|Satisfied social needs||Lack of accountability|
|Ease of idea sharing||Information leaks|
Email is still one of the most common communication channels. Usually, emails contain plain text, document attachments, and images. Effective email communication can offer guidance, save time, demonstrate competence, and establish a good name for an individual or company.
|Ease of tracking outgoing and incoming messages||Lack of security|
|Wide geographical reach||Possible uncertainty due to the absence of verbal communication|
A board portal is a secure board management software that provides instant private and group communication and secure access to data for better governance. Since this solution combines ultra-secure cloud technology with dozens of collaboration features, it has almost edged out email services and even face-to-face meetings.
|Accurate tracking of the board’s objectives, deadlines and meetings||Mobile capability limitations|
|Increased engagement of board members||The software may be unaffordable|
|Secure document exchange||Inability to join a board meeting if the internet is down|
Board communication challenges
Since poor communication causes conflicts and tensions among board members, it is vital to recognize the emerging problem in time to prevent it. Therefore, we encourage you to consider the most common challenges and ways to mitigate them.
On the one hand, differing perspectives can lead to stagnation and conflicts. However, on the other hand, they encourage meaningful conversations, promote problem-solving, and bring fresh ideas. That said, when properly managed, diverging views can benefit the board.
You can achieve this through active listening free of interruptions, a balanced ratio of talking to listening, and becoming more flexible while temporarily setting your opinion aside.
Conflicts of interest
Board members may face a conflict of interest for various reasons: risk and crisis management, unclear roles and responsibilities, schedules, etc. Moreover, an untimely resolution can lead to job loss and severe legal consequences.
Alternatively, to achieve good board communication with minimal impact of conflict of interest, directors can clearly describe roles and responsibilities, draw up a written code of conduct, apply conflict resolution practices, and even appoint arbitrators.
One of the illustrative cases to study is BlueCrest Capital Management, a British-American hedge fund. A conflict arose due to the wrong executive portfolio allocation, which left outside investors at a loss. The litigation lasted from 2015 to 2022, and BlueCrest Capital Management paid over $55 million in compensation due to the failure to address a conflict of interest in good time.
Confidentiality is part of the directors’ responsibility, which often becomes a challenge. Consequently, fellow board members can hardly have candid discussions and make informed decisions worrying about leaks. Strict director confidentiality rules, covering breaches in crisis management plans, and employing secure virtual platforms for data protection can address this issue.
Best practices for board communication
The decision-making course and outcome depend on the company’s approach to board member communications.
If you have room for improvement in how your board members work and communicate, look at the practices effective boards employ and consider what you can implement.
1. Develop a board communication strategy
The communication strategy contains a plan for communicating with board members and setting goals for each type of communication. For example, leaders may distribute easy-to-understand materials in advance of the meeting. It’s also helpful to share directors’ contact details (with their permission) and post up-to-date meeting minutes on your board portal.
All these measures create a close rapport, improve board communication, and increase productivity.
2. Evaluate communication styles
When the communication styles of board members don’t match, it has a detrimental effect on board meetings and teamwork. Specifically, while some people are more comfortable with formal meetings and phone calls, others prefer informal meetings and text messages.
So, you should consider colleagues’ preferences to develop the most optimal style for communication with board members.
3. Encourage transparent communication
Effective board communication enhancers are transparency, focus on the decision-making process, and diversity of thought. That is, directors must be honest whether they share good or bad news, allow each other to express opinions, and encourage constructive criticism.
All in all, disagreement and selfishness do not coexist with effective board member communication in good decision-making.
4. Establish expectations from board members
When board members know what is expected of them, it contributes to better board communication. In particular, the leader must establish clear expectations and agendas when communicating.
As for keeping track of your board’s experience and performance, modern digital tools such as board portal technology empower and facilitate it.
5. Employ the right business technology
Today’s leaders leverage the virtual board meeting solution to improve communication and save time and money. These board-tailored platforms close the communication gaps, allowing directors to keep in touch regardless of location and monitor progress toward the goal.
In addition, the solution is a good fit for task management, scheduling online meetings, and protecting sensitive data under GDPR and HIPAA.
6. Collect feedback
Feedback enhances communication, allowing board members to share opinions and discover communication areas for improvement.
You can get feedback from other board members in several ways, including face-to-face conversations after meetings, surveys, and emails.
If you need a communication strategy that includes all of these practices, enjoy the power of board portals to facilitate interaction among members.
Digital board communication tools
Online solutions for paperless board meetings have become indispensable tools for boards, providing them with everything to develop an effective board communication strategy.
Virtual boardrooms simplify board communications and management, boost board engagement, and make board tasks easier, delivering board members the following benefits:
- Military-grade data security
- Safe and swift file sharing
- Easy data access based on roles
- Task management and tracking
- Instant messaging
- Video conferencing tools
- A mobile user interface
Best of all? Board portals offer a variety of ready-to-use templates.
|While you’re still looking for a board portal solution, check out our board meeting agenda template for pre-meeting preparation and a board resolution template for better discussions and coordination at board meetings.|
Effective communication is a critical key point in giving board members a better understanding of who they are as directors and their responsibilities for achieving goals.
Therefore, executive management and the board chair must create an engaging, supportive environment to keep each board member informed and know what to avoid as the board of directors.
Complex communications have become a breeze with industry-leading online solutions like iDeals Board. It has been our expert’s top choice for years. Check out how it can turn your communication weaknesses into strengths.
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How to improve a company’s board communication?
Provide your colleagues with board communication tools, develop a communication strategy, encourage transparency, evaluate communication styles, and establish expectations from each of the committee members.
What is the importance of board communication?
Effective board communication is the board’s basis for thoughtful decision-making. Additionally, it promotes openness and strengthens ties between the board and management.