Board effectiveness – size and capacity

Here we discuss the appropriate size for effective boards and the concept of capacity, which leads to an important discussion around diversity, social inclusion and performance. But first, let’s clarify the difference between effectiveness and efficiency. These are not the same thing, and your board should be seeking to do both.

• Effectiveness is about achieving your objectives.
• Efficiency is about the resources used – time, people, financial – to achieve those objectives.

Your board may be effective, but not efficient and your board may be very efficient but NOT effective – not achieving their goals, mission or purpose. You should be seeking to be both effective and efficient. To do that, we need to understand the importance of size and capacity of our board.

Size

Many elements make up an effective board, and research shows that size is one determining factor. The size of the board will certainly affect how you communicate, interact, and the length of time it takes to make decisions or complete the required work of the board. It can also determine the breadth of skills and knowledge available. Boards that are too small can be limited in capacity or ability and so struggle to meet their goals effectively. Boards that are too large cannot make decisions efficiently and often have problems in communication due to the time required to ensure everyone has a voice and can contribute their perspective. So, for efficiency and effectiveness, a moderate-sized board is always best. The most effective boards are between 10-12 people. The Code for Sports Governance states:

The size of a Board shall not exceed twelve persons unless agreed with UK Sport / Sport England. (Requirement 1.9)

The Code does not specify a minimum board size and this will certainly be determined in many cases by an organisation's circumstances. The Charity Governance Code, however, considers boards of between five and twelve to be good practice (5.6.2).

Monitor board size carefully, it can appear that more people on the board to share the workload is better, but as with all organisations, this increase can lead to problems with slow decision making, conflict and inefficiency. This, in turn, can have an impact on your effectiveness to meet goals. This is true for small clubs, right up to medium and large governing bodies. An increase in board size is an increase in complexity which requires further management, resources and possibly a change in structure to facilitate communication.

You may, of course, want to appoint working groups or advisory sub-committees to help inform the core board decision making. This can be a useful mechanism for managing board members’ workloads and allow focus on particular areas of business. It is important to remember, however, that the board retains responsibility for decisions taken, and that the terms of reference for such bodies should be clearly defined and communicated.

Capacity

The capacity of a board refers to the skillsets, experience and perspectives of the individuals on the board, as well as their abilities to contribute to the discussion, policy-making or other board duties.

Building the capacity of your board means recruiting a diverse range of people based on the organisation’s needs and goals. Board composition and recruitment should be aligned to the strategic plan: identify what your organisation wants to achieve, the skills required to achieve that, and which of those are present or missing from the current board.

The chair of the board is extremely important in developing the capacity and skill sets of board members. He or she creates the conditions for the overall board and the individual effectiveness of its members and for the chief executive/manager (where one is employed). The chair should demonstrate the highest standards of integrity and probity and set clear expectations concerning the organisation’s culture, values and behaviours.

The chair also sets the style, tone and progress of board meetings and the flow of information. This will be covered in our section on meetings and decision making. Rather than explain the role of the chair (see our section on roles and responsibilities for this),  we will focus on how they can encourage the development of capacity and the implications this has for board performance.

An effective chair will:

• demonstrate ethical leadership by upholding the values of the organisation through example and ensure that the organisation promotes equality and diversity for all its stakeholders;
• ensure the board encourages a diverse range of people to serve on the board;
• regularly consider succession planning and the composition of the board;
• make certain the board has effective and transparent decision-making processes in place and applies robust challenge to proposals;
• ensure committees are appropriately structured with relevant and up-to-date terms of reference;
• ensure the effectiveness of board meetings by encouraging all board members to actively participate in discussions, drawing on their backgrounds, experiences, skills, knowledge, expertise and interests;
• ensure the effectiveness of board meetings by drafting a focused agenda and the timely provision of appropriate, thorough and accurate information;
• develop productive working relationships, built on mutual respect and open communication, with and between all board members and senior managers, especially the chief executive, providing support and advice while respecting management responsibility;
• support and appraise the performance of the chief executive officer and where appropriate other members of the senior management team;
• lead the appraisal of individual board members and the board a whole;
• take the lead on board member development matters, including induction and ongoing learning opportunities;
• recognise conflict of interests and other such constraints to board capacity and effectiveness.
• maintain the board members’ commitment to board diversity, renewal and succession planning, in line with the governing document and current good practice;
• be aware of, and respond to, his/her own development needs;
• build and maintain close relations and effective communications between the organisation’s various constituencies, including members and stakeholder groups to promote the effective operation of its activities.

The chair of each board committee fulfils an important leadership role similar to that of the chair of the board, particularly in creating the conditions for overall committee and individual committee member effectiveness.

There are some compliance reasons to ensure diversity on your board. The Code for Sports Governance stipulates a target of 30% minimum representation by each gender, and there are some indications other targets to increase diversity may be introduced through revisions to the Code. At the time of writing, it has been announced that the Code for Sports Governance is to undergo a review of diversity issues related to ethnicity. This leads us to further consider board member capacity and how diversity enhances all boards.