3 keys for effective Board Operating Procedures

The operating procedures of boards and committees are crucial in dictating the way in which they make decisions and shape strategy at an organization. 

However, this crucial documentation is not always up to the standards it should reach, which can result in inconsistent governance body performance and the problems that come with that. 

Is it time to create your own, and not sure what you need to do? We’ve got your back. These are the three things you need to take into consideration to ensure your board has effective operating procedures.

1. Create an operating procedures model

First things first: create a model by which operating procedures are created in order to ensure that all boards and committees within an organization are singing off the same hymn sheet. 

If each body is following a completely different set of procedures, then it is highly unlikely that they will be able to work harmoniously together. 

It can also mean that even when decisions are taken, the process of transferring these decisions into an effective implementation can be complicated. 

It is therefore of great importance that an organization develops a model for creating operating procedures, that must be adhered to by each board and committee in order to streamline collaboration. 

2. Make sure to adhere to country requirements

Another issue that is common with many boards and committees is that their operational procedures do not fulfill the minimum requirements of the country in which they are operating.

This is a typical problem that can occur due to regulation having been updated and therefore it is important that the operational procedures of each board or committee are audited on a regular basis to ensure that it is meeting the required regulatory requirements.

This may sound like a basic point but is something that we have discovered as a consistent theme at companies across the globe, 

3. Approve committee operating procedures

It is increasingly common that even in the case that sound operating procedures exist, the Board of Directors may not have approved the procedures of specific committees in the organization.

This can hamper accountability and credibility within the decision making organs of an organization. If the charter that governs a committee has not been ratified, then there is no guarantee that they will be following the same procedure model as other divisions of the organization. 

It is therefore incredibly important that the Board of Directors ensure that they are on top of operating procedures across the firm as a whole.