Building Collective Board Effectiveness Handbook Consultation

Boards of large and highly regulated organisations currently lack a shared understanding for delivering a key enabler of their effectiveness – how they come together as a collective decision-making body. While each Board actively works to enhance their collective functioning, there is no common language or how to guide for these practices. Our research defines this “Board Behavioural Dynamics” and our Handbook provides the first comprehensive framework for enabling Boards to function effectively as collective bodies.

The Handbook was developed through analysis of 50 FTSE Boards. FTSE Boards were our base due to high reporting requirements; however, our findings and recommendations apply to Boards of highly regulated large organisations. Practitioner validation of the findings was confirmed via 14 workshops with Directors, Company Secretaries, and Advisors of large, highly regulated Boards with varying Board composition, and participants from professional bodies and regulators. The Handbook has launched for formal consultation until 4 April. The full Handbook is available for download here.

The Handbook highlights six core processes that underpin Board Behavioural Dynamics: Appointing; Inducting, Training & Developing; Evaluating & Acting; NED Succession Planning; Composing & Designing; and Reappointing. The Handbook recommends that these six processes form an interconnected bundle rather than operating in isolation as found in the majority of our sample.

The research uncovers that different Boards require different levels of process sophistication based on their circumstances, although this is rarely explicitly recognised. To address this, the six processes are expanded into detailed Maturity Maps which outline three maturity levels – Reactive, Pre-emptive and Proactive. Each Maturity Map details contextual pressures, the procedural steps, outputs, and outcomes of each process over the three levels. This is summarised in our Maturity Matrix. This approach provides flexibility for Boards to adopt approaches proportionate to their specific challenges and contexts. Although we have defined three levels of maturity for each process, we do not align a best practice label to the most mature, Proactive approach. For example, those Boards experiencing stable composition and without complex challenges may align more to Reactive and Pre-emptive, whereas Pre-emptive and Proactive levels may be better suited to those Boards which are complex and under significant stakeholder scrutiny.

The Handbook emphasises the importance of clear oversight, recommending that while Chairs lead these processes (with Company Secretary support), Nomination Committees should provide structured oversight of all six processes and their interconnected actions. This represents a significant evolution in the Nomination Committee’s traditional focus primarily on appointments. The expanded oversight role enables Nomination Committees to take a more strategic view of how Boards develop and maintain their effectiveness over time.

The research identified two areas requiring further attention:

• Board composition approaches are often fragmented, making it difficult to assess Boards holistically. Governance codes appear to be used as a target rather than Boards reflecting and responding to their specific circumstances, despite codes being designed with inherent flexibility to allow proportional responses. The Handbook recommends explicit proportional design, ensuring processes align with each Board’s specific circumstances rather than defaulting to standardised governance code expectations. Tools are included in the Handbook to provide practical assistance to deliver this.
• There is growing recognition of Boards increasing their facilitation of interpersonal dynamics in Proactive Boards. Emerging practices focused on increased introspection of relationships, process integration, and outcomes such as inclusion. These are critical capabilities as Boards become more diverse and face increasingly complex challenges.

The authors will continue researching these themes, through ongoing interviews with Chairs, Senior Independent Directors and Advisors. A white paper exploring emerging practices is expected in late 2025.

The Handbook consultation period runs from February to 4 April 2025, with the final Handbook scheduled for July 2025. Through a series of weekly webinars and engagement opportunities, the authors seek input on key aspects including:

• The value of treating the six processes as an interconnected bundle
• The application of maturity mapping to help Boards deploy appropriate structures
• The role of Nomination Committees in overseeing all processes
•  Areas for further development.

As Boards face mounting pressure to address complex challenges, this Handbook provides practical tools for enhancing their collective capabilities. By bringing structure and shared language to previously informal aspects of Board dynamics, it delivers practical building blocks for more systematic development of Boards as truly collective decision-making bodies.

We welcome your input to strengthen the Handbook during the consultation period. The full Handbook is available for download here. Comment here or via email by 4 April.

Findings and Recommendations Summary

This is a guest blog written for the Institute of Directors, and therefore does not necessarily reflect the views of the organisation.

About the authors: 

Professor Ruth Sealy (Professor of Leadership, Henley Business School & Honorary Professor, University of Exeter Business School)

• With global expertise of corporate boards, Ruth’s research areas include board composition, corporate governance, inclusion, and leadership. In addition to her academic work, Ruth has worked closely with government departments, listed companies and the NHS, advising on strategies for board gender and ethnic diversity. This includes research such as the Female FTSE Reports (2007-2017), similar reports in Hong Kong and India, the Lord Davies Women on Boards Review (2010-2015), the FRC’s Board Diversity Reporting (2018), the Future of Corporate Reporting (2020), ethnic diversity for the Solicitor Regulation Authority (2023) and the NHS Board’s diversity and inclusion reports (2020 – 2024).

Loretto Leavy FIoD FCG (Company Secretary and Researcher, University of Exeter Business School)

• Loretto has worked as a Company Secretary to Boards of complex organisations for two decades across sectors and jurisdictions, focusing on financial services in the last decade. Loretto acted as Institute Secretary from 2012 to 2015 and holds the Diploma in Company Director. She is completing her PhD in Leadership researching Board Behavioural Dynamics (part-time). Loretto also served as Trustee for Magpas Air Ambulance for 8 years to 2021, also serving as Chair of Remuneration and Nomination Committees. She is leading the current research programme on Behavioural Dynamics and has done this by completing extensive literature reviews, analysing 50 FTSE Boards to extract the behavioural dynamic practices, and in workshops validated that the findings are in line with current practices in large and highly regulated organisations.