Questions to explore
Below are some practical questions that might arise in thinking about the collective trustee role of the Board in practice.
Shared understanding
- Do Board members have a shared understand of the purpose and what it means for the business?
- Is there a shared understanding about the material relationships on which the success of the business depends?
Relationships with investors and key stakeholders
- How in practice does the Board ensure that the interests of key stakeholders are taken into account?
- How far does the Board engage directly with investors to gain their buy-in on the strategic implications of becoming purpose-led and the long-term value creation story?
Decision taking
- How is decision taking anchored to the purpose?
- To what extent are the agendas and papers for Board meetings informed by the purpose and the relationships on which pursuit of that purpose depends?
- How are capital allocation decisions made? Are investment decisions being made by reference to a reasonable competitive return on equity over the cycle, with the explicit ambition to optimise for purpose rather than to maximise short term returns?
- What percentage of Board time is spent on financial matters?
Board membership and succession planning
- How diverse is Board membership including younger people as well as good gender and ethnic balance, buttressed by effective shadow / youth Board /advisory structures that are used to create genuine dialogue?
- Is there shared agreement of the Chair and the nominations committee about ensuring that Board and CEO succession has commitment to the purpose as a key criterion for appointing key personnel including the CEO?
Assessment of progress
- Are non-financial key metrics given equal prominence to financial metrics?
- What dialogue takes place on how pay structures and levels within the business can best enhance and encourage a purpose-led mind-set at all levels?