Consciously or unconsciously, every board independently decides where it is going to focus its attention and efforts.
We asked directors to reflect on their board agenda over the past 12 months and identify the top three areas where their full board has spent the most time, and we then ranked those items based on how frequently they end up in a top-three list. There was substantial movement between 2019 and 2022—no surprise, given the significant upheaval and challenges companies faced in 2020 and 2021. But there were also differences between how typical boards spend their time and how Gold Medal Boards (boards whose directors rate their board effectiveness as a 9 or 10 on a 1-10 point scale, and report the company as having outperformed relevant TSR benchmarks for two or more consecutive years) spend their time, as shown in the visual below.
As we wrote in Harvard Business Review in 2020, “Reviewing financial statements, audit activities, and compliance activities are the responsibility of the board, not the mission of the board. The most successful boards not only know this, but they craft their work and interactions to reflect it.” [1] How boards prioritize topics and structure their agendas to focus on future focused, strategic topics is critical. We saw that when we looked at how Gold Medal Boards focus their time in 2019, and we see it again in 2022.