Given today’s unpredictable business environment, it can be easy to focus solely on core operational activities while neglecting effective communication.
But establishing a clear stream of communication with the board can often prove the difference between a company functioning effectively and slipping into a negative spiral.
It’s an ethos Gaurav Kapoor abides by in his role as Co-CEO of MetricStream, a world-leading independent provider of governance, risk and compliance products and solutions.
“The relationship between leading executives and the board is critical to the success of an organisation,” says Kapoor. “Clear and direct communication fosters transparency, trust and accountability, ensuring the board is well-informed about the company's operations, challenges and performance.
“At a company like ours, with a seasoned investor base and independent board members who are experts and operators, getting diverse perspectives from board members is crucial.
“A transparent and streamlined communication channel also enables strategic alignment, informed decision-making and the ability to address risks and crises promptly, together as one team.”
Adapting to the new normal
Kapoor’s professional career began in the 1990s at Citi, where he led a segment of the organisation dealing with fintech consumer payments.
In 2003 he co-founded MetricStream armed with a mission to empower organisations to transform risk into a strategic advantage, accelerating responsible growth in the process.
Over the years, as CFO, COO, CMO and now joint-CEO, Kapoor has worked shoulder-to-shoulder with leading risk, compliance, audit and cyber executives from some of the largest companies in the world.
He is well placed to judge, therefore, the extent to which board communication practices have evolved, particularly in recent times given the impact of COVID-19 on the workplace.
“Since companies had to transition to remote or hybrid work arrangements, there have been new challenges every day,” Kapoor continues. “Reduced in-person interaction, time zone differences and the absence of informal gatherings have added to the complexities of relationship building.”
Kapoor highlights, however, that the majority of companies have risen to the challenge, establishing new ways of working to ensure there is little to no detrimental impact on strategic planning and transparent decision-making.
He adds: “Modern-day organisations have adapted to the situation by embracing technologies, meeting virtually, enhancing reporting mechanisms, planning thoughtfully and committing to maintaining strong lines of communication between executives and board members.”
In various facets of life, communication is key. The workplace is no different, and overcommunication can often be a useful tool for leaders looking to reinforce values or foster trust.
And yet, while some might allege there are no downsides to overcommunicating at work, Kapoor has a slightly different take.
“There is a potential danger of overcommunicating with the board, resulting in information overload that may undermine strategic focus and dilute critical messages,” he says.
“To strike the right balance, it's important to tailor communication to the board's specific needs and priorities.”
How to ensure efficient communication
Plenty of work has been done at MetricStream over the past couple of decades to ensure communication between executives and board members is as efficient as possible.
Kapoor points out that the differing experience, background and interests of board members presents a whole host of challenges, and insists this must be taken into account by those in positions of leadership.
“Improving communication with board members is essential for effective governance and decision-making,” he goes on. “It is imperative that, as a CEO, one understands the value, expertise and role of each board member as an individual, while still playing the collective board role.
“Collective communication on corporate performance, strategy, risks, regulatory adherence and decision making is important. But, in addition, tapping individuals for their areas of expertise is also very valuable.”
Kapoor’s own playbook on improving communication with board members includes the following methods:
- Regular meetings
- Clear and concise reporting
- Periodic email updates
- Transparency on financials
- Feedback mechanisms
- Tailored communication that caters to the unique needs of board members
These methods are crucial in ensuring transparency is fostered and collaboration enhanced within the boardroom setting.
While additional considerations are increasingly coming into play, leaders must also realise and recognise that a significant majority of board members are primarily interested in seeing data to support growth, opportunities and risks.
“Communicating in monetary terms is critical to ensuring your message is received and understood by board members,” Kapoor continues. “This is especially true when communicating the potential risks associated with the business so, you can take a calculated risk that drives growth with your eyes wide open.”
Pressure on leaders to set example
In business, the buck ultimately stops with those at the very top of the tree.
Leaders know the responsibility is on their shoulders to set a good example to the rest of their organisation in various facets, including when it comes to establishing good practice across key talking points of the day like sustainability and inclusivity.
The same goes for transparency which, if recent research from companies including Deloitte and Slack is anything by, is being prioritised by a higher proportion of employees than ever before.
Fostering a culture of transparency works both ways between the CEO and the board. When leaders place extra weight on openness, board members are better placed to provide feedback and identify areas where there is room for improvement. On the other hand, a more transparent board often commands greater respect and public trust.
Kapoor’s belief, from the CEO’s perspective, is that leading by example in terms of transparency sets a positive tone for the whole organisation.
“The CEO’s actions influence not only the board, but also the entire corporate culture,” he says.
“Transparency, demonstrated through open and honest communications, builds trust among stakeholders and investors, helps align the organisation around shared values, fosters accountability and upholds ethical standards – all of which are vital for the success of a company.
“Also critical to building trust is ensuring your leaders feel empowered to make decisions and have a high level of accountability.”