BOARD COMPOSITION – LATEST THINKING AND STRATEGIES
RC: What factors are required to have a strong and capable board? How does that translate into board composition?
Drury: A strong board requires directors who have achieved distinguished accomplishment in their fields of endeavour. They have earned respect over the years for their foresight, good judgment, courage and decisiveness. They can think independently, but also understand that most decisions require coalescing around a common path or course of action. We also believe that a major proportion of directors in the boardroom should have backgrounds of high achievement in the business world. Governing a business entity requires business acumen. While a balanced board may include non-mainstream business directors such as lawyers, government officials, and academics, they should constitute a minority.
RC: How should one think about gauging the relative quality of boards? Should it be framed in terms of ‘good or bad’, ‘strong or weak’ – or should a different mindset be adopted?
Drury: Board quality is a subjective concept. How can one judge whether a board is ‘good or bad’, ‘strong or weak’, if one is not observing the performance of directors in the boardroom? Quality is best discerned over time. In the final result, quality is a valuation of how directors of significant accomplishment come together, under capable boardroom leadership, and coalesce around important governance issues, resulting in the company’s sustained growth and increased shareholder value.
Apr-Jun 2015 Issue