A Key Competency for Board and Advisory Directors
The ability to pose incisive questions is not merely a skill; rather, it is an art form. Used in company governance, it wields transformative influence over the trajectory and vitality of an organization. As a seasoned board director, I have borne witness to the profound impact that the art of questioning can have on steering effective decision-making, fostering transparency, and cultivating a culture of accountability and innovation. In this article, I seek to delve into the profound importance of mastering this art for board directors, drawing insights from the National Association of Corporate Directors (NACD) 2023 Blue Ribbon Commission Report, "Culture as the Foundation: Building a High-Performance Board."
"The important thing is not to stop questioning. Curiosity has its own reason for existence." — Albert Einstein
The Crucial Role of Questions in Governance
At the heart of a company board director's mandate lies the responsibility to furnish strategic oversight and ensure the enduring success of the organization. This pivotal role requires going beyond a mere surface-level examination and demands a probing mindset. In other words, an ability to delve deep into the intricacies of the business landscape. Effective questioning in this context is not merely about information retrieval; it's a methodical exploration that uncovers concealed issues and potential concerns that are not immediately apparent. Scrutinizing management proposals, deciphering risks, and exploring strategic opportunities – among other duties – are facets where the art of questioning proves its mettle. By posing insightful and incisive questions, board directors can stimulate thoughtful discussions and guide the organization towards sustainable growth.
Crafting Questions for Depth and Clarity
The nature of the questions asked holds substantial weight. Open-ended inquiries such as, "What potential risks are associated with this strategy?" will foster dynamic discussions and usher diverse perspectives to the table. Conversely, closed questions such as, “Is this project within budget?” tend to yield limited responses, even while they are occasionally necessary for clarity. Striking a balance between these two types of questions is essential in order to cultivate a comprehensive understanding of the issues at hand.
Strategic questioning extends beyond the immediate horizon, encompassing inquiries about the long-term implications of decisions, alignment with the company’s vision, and resonance with stakeholder values. In today's business landscape, queries related to sustainability, social responsibility, and ethical considerations have all gained increased importance.
Questions as Catalysts for Risk Management
In an era marked by technological upheaval and global uncertainties, effective risk management has risen to the top of the priority list for boards. Boards are confronted with the imperative to pose incisive questions that delve into the very core of their organizations' operations. Probing the resilience of business models, the robustness of cybersecurity measures, and the organization’s preparedness for market fluctuations or geopolitical shifts is indispensable.
Beyond identifying risks, these questions aim to evaluate the organization's readiness to manage and mitigate risks effectively. By fostering a comprehensive understanding of potential threats and challenges, boards can actively contribute to the development of strategies that enhance resilience and fortify the organization against the uncertainties inherent in the contemporary business environment.
Nurturing a Culture of Inquiry
A board that poses questions lays the groundwork for thorough deliberation and the inclusion of diverse viewpoints. It encourages the evaluation of alternative perspectives and approaches, fostering an environment where forward-thinking solutions are championed in both problem-solving and innovation. In fostering a culture of inquiry within the boardroom, the precedent is set for the entire organization. Leadership signals that due diligence, critical thinking, and challenging the status quo are not only accepted but expected. This approach nurtures a company culture where management and employees at all levels are incentivized to think deeply, evaluate alternatives, and adopt a forward-thinking stance in problem-solving and innovation. As a result, the organization becomes more adaptable and responsive to challenges.
Eyes Open, Fingers on the Pulse
The NACD’s 2023 Blue Ribbon Commission Report underscores the importance of a director keeping their "eyes open" and "fingers on the pulse" – or, as traditionally stated, "nose in, fingers out." This philosophy captures the essence of the ideal level of engagement with management: overseeing without micromanaging. Directors, with their "noses in," play a crucial role in this delicate balance by asking thoughtful and probing questions that help steer management’s focus towards issues needing attention. Actively listening to responses becomes integral as directors aim to discern short- and long-term consequences, identify emerging patterns, and approach complex issues from various perspectives. This is particularly valuable in areas where management may lack clear answers and can benefit significantly from the diverse expertise and viewpoints of directors, such as in the realm of AI. By adhering to this principle, directors contribute to an environment where strategic guidance is provided, but operational decisions are left to the management team, fostering a collaborative and effective governance model.
The Symbiosis of Asking and Listening
The efficacy of questions hinges on the ability to actively listen to the answers, which goes beyond the simple act of hearing. Active listening entails a comprehensive understanding of not only the literal content, but also the context, the underlying assumptions, and the nuances inherent in the responses. By actively listening, board members gain a deeper appreciation for the intricacies of the issues under consideration. They can then pose follow-up questions that delve deeper into the subject matter, facilitating more informed and effective governance.
Navigating the Dynamics of Questioning
While the importance of strategic questioning is indisputable, mastering its dynamics is equally crucial. The manner and timing of the questions, coupled with the ability to inquire without implying judgment or criticism, are pivotal. Questions should aim at gaining insight, not placing management on the defensive. This approach ensures a constructive dialogue and cultivates a collaborative environment conducive to growth and improvement.
In Conclusion
The art of asking questions stands as a foundational tool in the arsenal of a board director. It not only aids in fulfilling fiduciary responsibilities, but also promotes a deeper understanding of the organization and its environment, thereby enabling strategic and prudent decision-making. As stewards of the organizations we serve, cultivating this art is not merely beneficial; it is imperative. Through our questions, we shape the future of our organizations, ensuring their growth, sustainability, and ethical grounding.
"The art and science of asking questions is the source of all knowledge." — Thomas Berger
ABOUT WILLIAM "BILL" JONES
William “Bill” Jones is an idea creator, a positive change maker. Wherever he goes, he creates lasting relationships based on shared values.
A board member, strategic advisor, and former public company C-suite leader, Bill has deep public accounting and commercial banking experience. Bill is member of Private Directors Association, serves on the Advisory Board of the National Association of Corporate Directors (NACD) Nashville Chapter and is Directorship Certified ®
Disclaimer: The views and opinions expressed in this blog are solely those of the authors providing them and do not necessarily reflect the views or positions of the Private Directors Association, its members, affiliates, or employees.