Clinging to a board directorship
Who does not wish to cling to a position which gives you status and an annual retainer? Many independent directors have been on the same board for ten years and over.
There are moments when they feel that for the good of the company they would better leave but don’t do so because they are not obliged to do so nor asked to do so.
Companies need fresh blood, innovative ideas, new ways of looking at things. Long serving directors may opt for the soft option, holding to the status quo, and seeking the safe ground.
Meanwhile markets are changing, modern technologies introduced, society moves on with its dynamic, new competitors are joining and disrupting industries and markets.
Companies need to be firm on making changes, but the directors are out of touch and not sensitive enough to the changes happening around them.
So, does your company have a succession policy for its directors? Do you have a performance appraisal system for the board? For the individual directors? Is there a board of directors’ rotation policy? When did the board of directors last examine its qualities, competences and skills to make sure that they are in sync to industry and market requirements? Is the board competence and skills mix still relevant to the world your company is living in today?
Does your board of directors have a corporate governance and nominations committee? Is it time to have one?
Are our individual board members brave and mature enough to say enough is enough?
About the author(s)
Joseph F.X. Zahra is a Malta based economist with over thirty five years of corporate leadership and business consultancy experience.