Dr. Earl R. Smith II

Dr. Earl R. Smith II
Managing Partner, The Federal Circle
DrSmith@Dr-Smith.com
Dr-Smith.com

My work with boards often focuses on the need to go well beyond the normal and expected. Visionary boards make contributions to a company that go well beyond the preservation and extension of shareholders’ value. With many boards not even meeting that basic fiduciary responsibility; it is a pleasure to work with one that go the extra mile.

Today the pace of business is unprecedented. Information is free flowing and commoditized Managers change jobs and take experience and knowledge with them. Boards must adapt to the changes and embrace new ways of governance involving more members of the organization and outside partners. They must be dynamic and proactive – consistently ahead of the curve.

A visionary governance models embraces change that replaces old ways of creating value with new ways of exploding productivity and rocketing profits. Directors, with a visionary leadership style, accept responsibilities while delegating authority and duty. Visionary leaders welcome the opportunity of leadership development. They mentor corporate management to new levels of capabilities and performance.

Visionary leadership shapes the corporate governance model so that is meets the needs of the company and advances the interests of the shareholders. Each governance structure finds and implements solutions to issues and opportunities. Some advisory committees focus on a single issue and then disband when the issue is resolved. Others are standing committees that focus on continuing challenges. New technologies disseminate information quickly, and corporate management is accountable for acting on information in a manner to advance the overall strategic plan. The rallying call is flexibility and innovation in response to new and ever changing challenges.

The governance model of visionaries resembles the set of a television situation comedy. Props and players change, but the platform is solid and stable. When certain products, services or modes of operation are no longer profitable, new models that are more profitable take their place. No one is stands still for long without challenge. Ideas come from every corner. A dynamic and proactive board fosters a culture of aggressive change to meet constantly changing challenges and threats.

Visionary boards are confident in their leadership style and shared style of management. Information, decisions, and accountability flows at all levels. Corporate management engages employees and line managers in idea generation and as operational advisers. Directors expect to set broad operational strategies and have corporate management execute strategy efficiently. Boards of directors meetings offer time for directors to challenge established ideas.

The CEO provides directors with periodic and concise updates between meetings, and all necessary reports prior to meetings for directors to review in preparation of the board meeting. There are pre-meetings for the purpose of directors networking and discussing creative solutions to issues hindering performance.

Directors expect ten to twelve boards of directors meetings annually. They also expect corporations to provide leadership development conferences and opportunities for personal growth. Compensation committees composed of independent directors establish a compensation plan to attract new talent and leadership to the board. Leadership development and compensation are issues critical to attracting the top corporate management, CEO and directors to the company.

Governance visionaries seem threatening and chaotic to many new directors. The inclusion of outside advisory committees to address single issues and advisors in developing strategies and the making decisions are unwelcome by autocratic leaders. The quick decision-making process and wide dissemination of information is foreign to leadership styles accustomed to hoarding information and power.

Directors committed to visionary leadership are constantly looking for new ideas. The Chairman will ask directors to assess operational procedures and report at the next board of directors meeting. CEO’s expect to have decisions challenged in the boardroom. CEO’s are encouraged to explore new procedures. Visionary board expect failures – they are part of trying new things. Failures are a part of the cost of doing business in the new era of the fast-paced economy. However, they also expect that failures will be la source of learning and improvement.

Visionary governance encourages a decentralization of information and decision-making authority. I challenges ideas – products, procedures and operations are critically reviewed and sometimes discarded in favor of new profit centers and streamlined procedures. Visionary governance demands results and requires fast paced, high-energy decision makers committed to enhancing shareholder value.

When I have helped a board move from the ordinary to the visionary, the experience is very rewarding. It seems that light start to go on all over the place. Then sparks begin to fly as the visionary process kicks into gear. If you board is under producing, send me an e-mail and we can talk about the possibilities.

© Dr. Earl R. Smith II

Related Articles:

• Governance for Growth
• Board Assessment – A Critical Part of Good Governance
• Developing Visionary Leadership – Board Contributions
• Board Governance – Engaging Leadership
• Visionary Boards of Directors

Dr. Smith is Managing Partner of The Federal Circle. The Federal Circle partners with teams and existing companies. We help them up their game and win big in the Federal space. We also arrange funding for acquisitions and expansion by acquisition. Our model is based on the belief that, if you select the very best and work with them in a highly professional and focused manner, the results will be truly amazing. He is the author of Amazing Pace: Turbo-charged Business Development – a book that shows how Advisory Boards can dramatically increase revenue. Dr. Smith is also the author of Dream Walk: Parables for the Living – a book of Raven Tales and exploration.

This entry was posted on Friday, October 24th, 2008 at 8:48 AM and is filed under Governance. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.