What is the role of a company’s board directors? There are many possible, and valid, answers to this question. Guidance, oversight, succession planning, and executive compensation often are mentioned, and rightly so. But at the Private Company Governance Summit 2024, speaker Jon Wells of Midmark Corporation shared a different answer: to be a ‘professional question asker’ There is a quote often attributed (properly or not) to Albert Einstein: “If I had an hour to solve a problem, I’d spend 55 minutes thinking about the problem and 5 minutes thinking about solutions.” It is tempting to jump into solving the problem, especially in our fast-paced world. But you do not want to solve the wrong problem! Asking the right questions can help the board director, his or her fellow directors, and company executives think about the issue, sometimes in a different way. This is not about questions to find fault or trip someone up, but questions to help everyone understand. With this in mind, the team is now better prepared and ready to start thinking about how to answer those questions and solve those problems. Asking the right questions helps all involved consider alternatives and different perspectives, such as those of customers, suppliers, investors, employees, and other stakeholders. “What” questions are a good start to understand the situation or the proposal, but eventually it is time to move on to “why” and “what if”. “Why” did something positive occur – was it a repeatable process, chance, market conditions, or something else? What can we learn to take into the future and build on that success? In the case of a negative situation, was it preventable and how can that be used to reduce the chances of similar occurrences in the future? We get better by taking the time to understand the good and the bad. For a strategy review, budget review, or other proposal, there are a lot of great “why” questions to ask about assumptions used. As appropriate, think about the “5 Whys” approach developed by Toyota, intended to create an understanding of the root cause(s) of the situation before looking at solutions and lessons to learn. “What if” scenarios are great for bringing risk into the discussion. Risk was a key topic at the Private Company Governance Summit 2024. Board Directors may have various perspectives, experiences, and expertise which enable them to consider different threats, opportunities, and future states. These can help all involved more thoroughly consider and address potential risks to the status quo and proposals. This line of questions can be extended to include ones about what the long-term impacts are of proposals and decisions. I recall a recent dinner with three start-up co-founders who wanted to meet to ask for advice. We had a great discussion and a nice meal, but I am not sure I provided them many suggestions. Instead, I posed a number of questions, which they said were important for them to consider as they continue their efforts. I asked “why” questions such as “why would someone use your product instead of the competition?” and “why would someone pay you for this service?” I think (and hope!) these provided them a path to better address opportunities and risks. Of course, board directors provide value beyond just asking questions. With a better understanding of the issue or proposal, they are now better positioned to also share their knowledge and experience, allowing them to contribute toward answering those questions.
