Franchise Board Meeting Duration – Best Practice #52
Key here is ensuring adequate time and focus is afforded to the many elements of governance in a regular board meeting.
The governance role includes compliance, monitoring and controls, but it also includes responsibility for the strategy and direction for the business – including its fundamental purpose and values. It goes without saying that directors carry a lot of responsibility to guide an organisation to achieving its purpose and compete effectively in an environment that is increasingly dynamic. Time associated with board meetings therefore is particularly important, as increasing amounts of time will need to be associated with understanding, evaluating and responding to the many environmental forces, and, associated threats and opportunities provided.
So, given board meetings need to be long enough, how long should they be?
There is no single board meeting duration recommended for all companies nor franchisor companies. The ideal board meeting duration will depend upon the situation for the business. The New Zealand Institute of Directors research points to many meetings ranging between a couple of hours to a full day, with most being several hours. For franchisors our own research, involving a small diverse sample of New Zealand franchisors and national master franchisees, indicated the most common timeframe for board meetings being one full day – however this ranged from a half day to two days.
But clearly, the board meeting duration is only one dimension of resource tied to the role of governance. Other key factors relevant to the board duration decision include:
- Board meeting frequency, as the regularity of board meetings is a key driver of total governance resource. In our research, board meeting frequency ranged from three regular meetings to 11, with 6.5 being the median. Some companies supplemented this with separate strategy days and workshops.
- Business strategy and environmental dynamism, as both drive an increasing need for more governance focus (time).
- Board experience and familiarity, as shorter board meetings may be possible if more members are very knowledgeable of the business and relevant environmental trends.
- Senior management involvement, as some companies’ senior management teams play a major role in the development of business plans and strategy.
Franchisors have a complex business and organisational network to manage and navigate in order to drive long-term sustainability. There are many moving parts, including many critical stakeholders and a dynamic business environment. A franchisor has a responsibility to ensure that board meetings are long enough so that necessary topics can be covered, options thoroughly assessed before decisions are made, and good governance is generally undertaken.
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