The key purpose of a board of directors is to direct an organisation's affairs to meet the legitimate interests of its stakeholders.
In order to be able to do this effectively, it needs to establish the organisation's culture and goals.
This is done through a vision, mission and values exercise.
Vision: A vision is a picture of the future created in the imagination, and communicated in a way that motivates others to act.
A vision helps unite people towards a purpose. Possessing a vision means having the ability to create and effectively communicate a picture of the future that builds on a realistic understanding of the present.
Most important, it should inspire people to want to work for you or do business with you?
Creating and living a vision is the role of leaders in organisations. They must espouse it and help others to believe it.
Mission: is the overall purpose of an organization: what you do, who you do it for, and how and why you do it. It sets boundaries on the organization's current activities.
Values: Values are the beliefs of an organisation, the expression of what it stands for and how it will conduct itself.
Values are the core of an organisation's being, they help to distinguish this organisation from others. They underpin policies, objectives, procedures and strategies because they provide an anchor and a reference point for all things that happen.
Vision, mission and values statement: is a collection of words, created collaboratively, that summarise what an organisation is intended to look like.
It should include references to the various stakeholders in the business and, sometimes, broader societal interests.
It helps to determine strategy and policy, and how the organisation operates.
A successful vision, mission and values statement accomplishes six goals:
The board has ultimate responsibility for determining the vision, mission and values of an organisation?
The best way to do this is for the whole board to go away on a residential corporate retreat with an experienced facilitator.
Robert Dilts' Logical Levels model is one of the tools we use for both reviewing a culture and developing a formal statement.
Asking the following questions will help you identify the current culture: -
When you have the answers, then check – is this what you really want; how could it be better; what else could you aspire to?
Are the answers at each level fully congruent with the others?
Are they sufficiently challenging, yet realistic and likely to encourage the intended level of innovation and risk taking?
You can then introduce changes that will move the organization towards your ideal. This formal culture will provide a firm base onto which to build goals and strategy.
When you have determined your organisation's vision, mission and values, it is essential that the board demonstrates leadership to communicate, endorse and implement them.
Are they driven by the chairman and managing director, and endorsed by all the other board members?
What practical activities are taken to communicate them throughout the organisation?
Are strategies consistent with them and consistent with each other?
Are strategies and operations monitored and reviewed regularly to ensure long term consistency with the vision, mission and values?
If you take the trouble to address these issues and communicate them to every employee, customer and supplier, you will have a powerful tool that will affect every hiring, every decision, both management and strategic, and every communication.
Its effect can be magic.
* Inspired by the Institute of Directors Standards for the Board