Diversify the boards
There is no alternative to heterogeneity. Different views and opinions from persons with different experience and competence enrich discussion and provide for better decision-making. People with similar views and opinions on a board of directors can fall into the trap of immobility, recycling of the same ideas year in-year out, lack of innovation in policy and strategy. Grid-lock.
There is no alternative to diversification in boards. This can take different forms… including internationalisation, the inclusion of women, a cross-section of age-groups and boards that are multi-professional.
The benefit of having independent professional board members on boards of family business has been mentioned on a number of occasions in this blog. The outside professional view and opinion can shake the status quo and ensures a more detached approach to a usually emotionally laden board experience.
The proposal now takes a wider significance – board members from different countries come with different experiences and perspectives and approach issues with different cultural mind-sets. Alternatively, seeking board members with international experience even if they are Maltese, will provide the company with a more open and fresher insight into matters being discussed and the decisions that need to be taken.
The same happens with the introduction of women board directors. The sense of intuition coupled with competence and experience enriches the board decision-making capabilities. In Germany, business schools are preparing women for board positions with the aim of increasing their number on boards.
On various occasions this blog advocated structured succession planning for board directors. Age is indeed another factor – most boards are composed of directors who have held their position for over a decade. Younger board members introduce a more present and relevant perspective to the decision-making process… a better understanding of present reality, inject an alternative side to risk-taking and new venturing, and a more optimistic view of the future.
A mix of professionals – engineers, accountants, marketers, HR specialists and scientists besides business managers will also enable the board to get a multi-disciplinary view of the various issues on its agenda.
Boards need to be strengthened by talented members who can take different viewpoints and who can challenge established ideas and ways of doing things. A positive tension at board level helps in creativity, innovation and sincere discussion on policy and strategy. A diversified board is a harbinger of successful outcomes.
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.