BOARDS THAT WORK
Boards face intense scrutiny from shareholders, regulators, politicians, the media, employees and other stakeholders – many of whom have never set foot in a boardroom nor faced the unique challenges of being responsible but not directly charged with managing the enterprise.
The role is an ambiguous one, calling for both intimate knowledge and loyal support of the company, and the cool eye of the detached professional, ready to act to correct the course as need be. That is a tall order, and many do take the passive approach, screening director candidates by their friendliness to incumbents and their unwillingness to ask uncomfortable questions. It is easy to caricature board practice, and many indulge in doing so. Let’s try instead to unpack the human elements that make great boards great.
Cultivate candor. Though formality of setting and infrequency of meetings combine to inhibit the ability of directors to speak plainly with each other, the board must find ways to avoid dysfunctional politeness. How can this direct speech and open behaviour be developed amongst directors who likely do not know each other well?
Cherish trust. Consider holding an Executive Session at the beginning of meetings. This underlines that the board is in charge, gives every director an opportunity to be heard before ‘game time’, and gives directors the opportunity to highlight among themselves any issues caused by the inevitable asymmetry of information available. Another technique is to consider holding a standing pre board meeting breakfast which all non-management directors are expected to attend to voice any questions or concerns.
Apr-Jun 2014 Issue
Solon Group, Inc.