Well-balanced boards are more effective and make better decisions, but building a balanced board remains a challenge for many organisations. Despite cautionary tales of what can happen when the balance of power is tipped too far in one direction – Fred Goodwin’s tenure at RBS and Camila Batmanghelidjh’s reign at Kids Company are just two of the more well-publicised examples – finding the right individual for the board at the right time is not always easy.

The primary duty of the board is to promote the success of the company, but plenty of stereotypes exist who can impede that success: the too-risky director, the risk-averse director, the truculent director, the absentee director and the hands-on director, to name but a few – all with personality traits that can affect the equilibrium of a board in a detrimental way.

Boards working as a team to anticipate the changes and challenges ahead and taking early action to ensure that the necessary resources are in place to deal with them are crucial to success. But their efficacy can be jeopardised if directors feel unable to challenge or if they fail to keep unfettered enthusiasm in check. So how can organisations sort the wheat from the chaff and find that particular individual that the board needs?

The role of the nomination committee

The nomination committee plays a pivotal role in appointing directors to the board. As noted in ‘Coming out of the shadows’, a piece of research that we undertook with EY in 2016, “if a board lacks the right balance, knowledge, skills and attributes, the likelihood of it and its committees operating effectively is greatly reduced”. The role of the nomination committee is, therefore, critical when trying to build a balanced board.

Oct-Dec 2019 Issue

The Chartered Governance Institute (ICSA)