Holistic insight--seeing not just all the relevant pieces but how they fit together and the picture they form --allows a board to make decisions that optimize a company's growth and create long-term value. A board operating with holistic insight is a genuinely strategic asset because its judgment stems from broader and deeper perspectives.
Having served on, worked with, and advised hundreds of boards, I have seen far too many cases of boards giving management advice and counsel based on a less than holistic perspective. There are three primary reasons:
--the board has too few independent directors,
--directors lack the necessary combination of curiosity, knowledge, and experience to give appropriate guidance, and
--boards are making decisions in an information vacuum.
So how do you ensure that your board can offer holistic insight? Recruit the right people. Whether you tap into your own network or use executive recruiters, search for board members who have not only deep vertical knowledge but also the ability to understand how their discipline connects with other disciplines. Typically, ideal candidates are past or present CEOs or CFOs who have experience in seeing the whole of their organizations. "Holistic insight" is a crucial characteristic to add to your skill sets such as "good listener" and "strong team player" on your board matrix. In doing your due diligence on potential board candidates, you should determine if this person has applied holistic insight in their roles as either a board member or an executive.
Holistic board members can analyze issues, understanding that it is not always a case of black and white; can read between the lines; are forthright in asking what is not being discussed; are willing to address risks; and are able to present out-of-the box, creative solutions.
My experience is that independent directors are the most capable of approaching their jobs holistically. Independent directors are truly objective; they are not caught up in the day-to-day operations and are unafraid to speak up. The goal always is to create a non-threatening transparent atmosphere in which questions can be asked to better understand the whole of the company. Independent directors can create an atmosphere where realistic, less-biased information is valued and relied upon to make the right decisions for the long term. This is especially important in a family business where often emotions and relationships can influence decisions.