"Our board is a real asset." We’ve heard it so many times, but do we know the value of this asset and are we getting the best return? You can manage your board asset and you should expect a good return. It’s all about knowing the value and then practicing a few simple habits that will pay big dividends.

You can do the math in your head using three models—expense, asset, and dividend. Use your best ballpark estimates. It’s not important to be precise, but rather to understand the magnitude of the collective asset.

The expense model views governance as a necessary operating expense. It takes into account all the associated expenses of travel, accommodations, meals, meeting rooms, entertainment, speaker fees, equipment rentals, teleconferencing, awards, gifts, and other incidental expenses. Don’t forget the cost of staff preparation and printing and distribution For organizations that draw their directors from a local area, travel expenses are not great. Large, national organizations incur significant expenses in bringing directors together for meetings. Even if your organization doesn’t pay the costs directly, the directors foot the bill somehow.

The asset model seeks to measure the collective professional value of board members. That is, what is the value of the directors’ professional time to their respective organizations or to other boards if they were not at this meeting? Don’t think they would be idle. It’s not likely. Boards seek experienced leaders with proven worth whose time has value. This model simply estimates the collective value of the directors’ time in terms of an approximate salary or compensation value. We’re not even considering preparation and travel time here. Tips to keep in mind:

• Don’t forget to include the CEO and staff participating in meetings.

• Directors volunteer their time, but it retains a high value.

• Don’t discount the value of a retired director’s time. Retirement does not diminish one’s value.

The dividend model, the most difficult to assess, seeks to measure the value board members bring to the table in terms of experience, skills, leadership, practiced analysis, and honed judgment—the collective wisdom for which the board is assembled. These are talents available to the organization every minute of every meeting.

• Are you using these talents fully or are you silencing them by numbing directors with marathon reports and unproductive discussions?

• Are you deliberating the issues that require these important talents or are you applying them to routine, perfunctory activities?

• Are you using these talents to make decisions that advance the organization or are you frustrating them?

• For simplicity, the dividend value may be estimated using the same numbers as the asset model.

• To appreciate the real value, consider that these three models are not alternative estimates; they are cumulative. That is, they are three lines on the same ledger. All apply at the same time.

Let’s put some numbers to the models. A survey of national membership associations whose directors are from across the nation shows some dramatic numbers. These associations report budgeting $11,000 to $36,000 per meeting for the direct expenses. The asset model valuation varies with the makeup of the board, but our survey estimates this to be in the range of $10,000 to $20,000. Taking all three models into consideration, the total value of each meeting may range from $31,000 to $76,000. Typical meeting schedules are three or four times a year and are usually a day-and-a-half in duration (about 9 hours of meeting time). Every hour is worth about $3,500 (using the minimum value) and every 10 minutes of board time is worth about $600 or more, available as a board asset.

Obviously, local boards do not have the expenses of travel. That reduces the total value, but meetings are usually more frequent. Thus, the asset and talent models make the value of board time very high.

To take it one step further, the value of an individual board seat can be determined by dividing the total annual value by the number of directors. For the organizations surveyed, the board size averages 16, making a board seat in the range of $12,000 to $20,000 annually.

• Are you "carrying" members who are consistently absent or who view board meetings as social events and do not participate in the serious work of the board?

• Do you regularly evaluate the performance of all directors? Non-contributing directors need to be replaced (see the management briefing on Building Your Board Portfolio).

• Do you track the attendance of directors? Many organizations have bylaws that provide for removal for non-attendance, but few enforce the rule.

No matter what the numbers are, the board is a treasured asset. How can you improve the return? Compare the following practices of exceptional boards to common experiences.

• Begin meetings on time. Everyone will get the habit. Remember, a ten minute delay costs hundreds and is an opportunity foregone.

• Maximize board talk time; minimize staff talk time. The purpose of board meetings is to use the collective wisdom of the board.

• Prepare agendas and materials that lead to decisions. Use a consent agenda to dispense with routine business in the first two minutes and build a strategic agenda to focus the remaining time on substantive issues that require the collective wisdom. Avoid using meetings for "information only" reports.

• Distribute all information needed for board decisions in advance of the meeting.

• Distribute written reports in advance of the meeting and don’t repeat them with oral reports.

• Prepare draft motions to accompany the agenda so directors know what they are being asked to vote on.

• Use your Web site to provide timely board access to information. Younger directors expect to access information when, where, and how they want, and don’t think the "older" members can’t use electronic information technology.

• Request written evaluations of every meeting and track results. A few questions regarding meeting preparation and participation will yield improvements and give directors an opportunity for comments.

• Engage the board in regular, formal self-assessments of its work. Making this an annual board activity keeps it in perspective and on the agenda.

It goes without saying that the board is worth far more than the sum of the time spent together. As you begin to use electronic access to information and board interactions, the between-meeting time becomes just as important as the time the board spends together. Once you recognize how truly valuable an asset your board is, you will never again accept minimal returns.

Portions of this paper appeared in Association Management (American Society of Association Executives), September, 2002.