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 m