5. Conducting Board and Committee Business
Adapted from “Transforming the Dialogue: Fiduciary Essentials” by Frederick (Rick) Funston. Amazon, 2025
“Even if you are on the right track, you’ll get run over if you just sit there.”
Getting the Board Moving!
Being a board member is more than attending meetings—it's about actively shaping the direction, culture, and decisions of your public retirement system. To effectively conduct board business, you'll need to understand how to manage your time, collaborate with colleagues, set clear expectations, and ensure accountability.
Here are seven key questions and answers that can guide you in conducting your board business effectively:
Key Questions for Effective Board Business
1. What Does "Prudence" Mean for Our Board?
Prudence isn’t just caution—it’s thoughtful, forward-looking decision-making. Prudence involves careful research, seeking expert advice, weighing risks, and always keeping the long-term mission in focus. Remember, prudence is judged by the thoroughness of your process, not solely by the outcomes.
2. How Do We Select, Evaluate, Compensate, and Plan Succession for Our Chief Executive?
Selecting the right Chief Executive (CE) is one of the board’s most critical tasks. Establish clear expectations from the start, regularly evaluate performance, and maintain ongoing feedback. Don’t forget succession planning—it ensures your organization can weather leadership changes smoothly and confidently.
3. How Do We Foster a High-Performing Ethical Culture?
A strong, ethical culture starts at the top. As trustees, you must clearly define values, demonstrate integrity in every action, protect whistleblowers, and encourage open communication. Addressing problems transparently prevents them from becoming larger issues.
4. How Can We Make the Most of Our Limited Time?
Your time is valuable and limited. Use strategic agendas that focus on significant decisions, prioritize concise and insightful materials, and employ clear decision-making frameworks. This helps you focus on big-picture strategic issues rather than getting bogged down by details.
5. How Do We Collaborate Constructively?
Effective collaboration means respectful dialogue, listening openly, and building consensus. Work closely with stakeholders, executives, staff, and advisors, encouraging diverse perspectives and innovative thinking. Constructive collaboration results in better decisions and stronger governance.
6. How Can Committees Improve Our Efficiency?
Committees help you break down complex issues into manageable tasks, diving deeper than fullboard meetings typically allow. Investment, audit, governance, and risk committees can enhance due diligence, develop expertise, and help the full board make informed decisions more efficiently.
7. Why is Regular Board Self-Evaluation Important?
Regular self-assessment helps you improve continuously. Through surveys, structured interviews, or external evaluations, you can identify strengths, address weaknesses, and ensure alignment with strategic goals. Self-evaluation supports a culture of ongoing improvement and learning.
Ethics, Conduct, and Handling Conflicts
As a fiduciary, your duty of loyalty requires always putting plan participants and beneficiaries first. You must proactively manage conflicting group interests, avoid personal conflicts of interest, self dealing, or misuse of assets. Ethical conduct involves openly disclosing financial interests, recusing yourself from conflicts, and following clear ethical guidelines. Maintaining high ethical standards protects you, your board, and beneficiaries.
Governance Policies: Making Your Decisions Stick
Well-defined governance policies provide clarity and accountability. Policies differ from procedures—policies set direction, while procedures detail implementation. Regularly review and update these policies to remain aligned with legal requirements, leading practices, and your unique circumstances.
One size fits one! Remember, governance is never one-size-fits-all—tailor your policies to your board’s specific context, resources, and objectives.
Effective Board Engagement and Constructive Challenge
A high-performing board challenges constructively, balancing oversight without micromanagement. Encourage respectful questioning to avoid complacency and groupthink. The board chair plays a key role in facilitating open dialogue and maintaining order, ensuring everyone contributes effectively.
Learn from cautionary tales like Kodak or Blockbuster—avoiding entrenchment means staying flexible, embracing change, and challenging assumptions constructively.
Navigating the Public Sector "Fishbowl"
Operating in public pension governance is like being in a fishbowl—everything you do is visible and subject to scrutiny. Key differences from private-sector governance include:
Greater transparency and public accountability.
Complex stakeholder relationships requiring consensus-driven decisions.
Limited resources and less budget flexibility.
Higher turnover of trustees due to elections and appointments.
Understanding these dynamics will help you adapt effectively from a private-sector background.
Roles of the Chair and Vice-Chair
The chair and vice-chair are critical to the board’s effectiveness:
Chair: Leads meetings, sets strategic agendas, manages board dynamics, evaluates the CE, and acts as the spokesperson. A good chair fosters open, respectful communication, encourages diverse views, and maintains order and cohesion.
Vice-Chair: Steps in as needed, assists with oversight, and supports board continuity. Often, this role serves as preparation for future chairs, providing essential leadership continuity
Committees: Your “Not-So-Secret” Weapon
Committees are vital for in-depth review and specialized knowledge. They improve board efficiency by:
Diving deeper into specific issues.
Providing oversight, identifying policy implications and making recommendations to the full board.
Distributing the workload and developing trustee expertise.
Effective committees align with the board’s strategic goals, maintain clear charters, and provide structured reports to the full board.
Choosing and Evaluating the Chief Executive
Choosing the right CE is pivotal. Consider long-term goals, required skills, cultural fit, and leadership qualities. Clearly define expectations upfront, conduct regular evaluations, and provide continuous feedback.
Evaluation should include:
Clear annual goals set collaboratively.
Ongoing, constructive feedback.
Emphasis on strategic thinking, adaptability, and responsiveness to change.
Succession planning, including emergency transitions, help to assure long-term stability.
Regular Board Self-Evaluation: Continuous Improvement
Think of self-evaluation as your governance "health check." Regularly reviewing board performance helps you identify strengths, address weaknesses, and ensure you're meeting fiduciary responsibilities effectively. External facilitators can provide valuable neutrality and expertise.
Evaluations should consider:
Board-wide performance and dynamics.
Committee effectiveness.
Individual trustee contributions (handled confidentially).
Use evaluation results to inform trustee education and future onboarding strategies.
Lessons Learned About Conducting Board Business
Governance policies help to assure clarity, consistency, and prudent oversight.
Ethical conduct is non-negotiable—always prioritize participant, beneficiaries and transparency.
Constructive engagement and open dialogue strengthen decision-making and prevent complacency.
Public-sector boards face unique transparency, accountability, and resource challenges.
Leadership roles (chair/vice-chair) set the tone for effective board dynamics.
Committees significantly enhance board efficiency and effectiveness.
Selecting and evaluating the CE requires clear expectations, regular feedback, and proactive succession planning.
Regular self-evaluation promotes continuous learning, improvement, and effectiveness.
By keeping these lessons in mind, you can confidently navigate the complexities of board governance, ensure responsible decision-making, and fulfill your fiduciary duties effectively.
Want to learn more?
Board Smart subscribers, explore these resources:
Governance Policies
Conducting Board Business Essentials
Ethics, Conduct, and Conflicts of Interest
Board Engagement and Constructive Challenge
Operating in the Public Sector Fishbowl
Role of Chair and Vice-Chair
Role of Committees
Choosing the Right Leadership
Board Self-Evaluation
Evaluating the Chief Executive
You’re ready to lead your board with clarity, prudence, and effectiveness!
Contact rfunston@funstonadv.com or Slussow@boardsmart.com
Click here to order “Transforming the Dialogue: Fiduciary Essentials.”
