Nearly two years ago, I wrote a feature story for Ethanol Producer Magazine about ethanol plant board members. Ever since then, I’ve had an interest in the work that ethanol plant board members do.

Actually, to be more accurate, my interest in board members probably goes back further than that. Before I started writing for EPM, I was a daily or weekly newspaper journalist. That means I sat through many city council, county commission and school board meetings. It was there that I first came to the conclusion that many of the people serving on boards are hardworking, dedicated and underappreciated for what they do. It’s a job that takes a lot of time and pays very little, in most cases. All this also applies to ethanol plant board members.

That’s why I chose to attend a presentation focused on ethanol plant boards while I was at the recent 26th annual Unite and Ignite ethanol conference put on by American Coalition for Ethanol (ACE). Ty Inglis, partner with Eide Bailly LLP, spoke during an Aug. 27 breakout session entitled “Does Your Board ‘Unite & Ignite?’”

Inglis conducted a very interactive presentation, with lots of audience participation. Partway though, he asked the nearly 30 people in the room to raise their hands if they served on a board and the room filled up with raised hands. There was also one person (that I saw) that identified themselves as an ethanol plant CEO and a few others that weren’t either board members or CEOs.

There was a lot of valuable information conveyed during this presentation, including input from board members and others sitting in the audience. Here are a few of what I consider to be highlights.

Inglis talked about some boards’ tendency to get bogged down in the details rather than look at the big picture. A board might spend a lot of time doing a detailed review of the company’s financial records rather than focusing on more substantive issues and trusting the details to the management they hired. Another example he gave was of one board that talked more about whether the company should purchase a certain vehicle than the company’s long-term vision for the future. Board members should be keeping their “noses and fingers out” of operational decisions, Inglis said. One way to really dig into the important stuff is to pick three or four big, long-term issues and select specific meetings to tackle the topics, he recommended.

How is it possible for a board to focus on long-term vision and let go of the day-to-day stuff? It starts with hiring a good CEO, he said. The book “Boards that Deliver: Advancing Corporate Governance from Compliance to Competitive Advantage,” by Ram Charan, reveals that boards can add value by hiring the right CEO because the position is very much linked to a company’s performance. This can take time, Inglis said, as it can take one or two years after a CEO is hired to see if that person is a good fit for the company. If not, it can take up to a year to get rid of that person and another year lost in transition after that CEO is gone.

In fact, of five areas where boards can make the greatest contributions, the book identifies hiring the right CEO and having a good succession plan in place as the No. 1 biggest contributor. The next four, listed in order, are CEO compensation, the right company strategy, the leadership gene pool and monitoring company health, performance and risk. Unfortunately, studies have shown that most boards put this in backward order, with monitoring health, performance and risk in the No. 1 slot and hiring a good CEO in last place, Inglis said.

Another thing he recommended was frequent self-examination. One board does this by spending the last 10 minutes of the meeting talking about what things it had done well during the meeting and what things it had not done well. A board member from the audience mentioned how helpful periodic board retreats can be, to keep the board members working together effectively as a team. This can be a vital part of making sure a board has a strategy for the future and that all board members can articulate it clearly. Yes, lively discussions about issues can be good, Inglis said, but once a decision has been made the board needs to move forward as a unified whole. “At the end of the day we’ve got to disagree without a disagreement,” he said.

Finally, he talked about the way the board gets its information, whether that’s newsletters, emails or packets of documents sent prior to the board meeting. The book points out that, to be successful, a board needs the right information, in the right format and at the right time. Is the board packet too thick to wade through or is it sent out too late, meaning board members don't have time to digest the information before the meeting? Some good ideas for the board packet include a letter from management, summarizing the contents of the packet and highlighting certain important issues, the results of employee surveys and reports from various board committees.

What are some of the things you think makes for an effective ethanol plant board?