Not so soft on boards
I have been writing for some years now on corporate governance from the soft view of group dynamics, attitude, behaviour and style.
I would like to add a few more ideas that pave the way to successful board leadership and effectiveness in corporate management. Again, these are not exhaustive. Many more ideas come to mind but let me sketch here a few.
First, Chief Executive Officers have a shelf life and it is the board of directors’ responsibility that they never stay beyond their due date. CEOs generally get into their comfort zones after a few years and lose their sparkle of enthusiasm, innovation and experimentation and then the company stops recreating itself. On the extreme, they become blinded by the power and authority of their positions and lose sight of their people and their customers. They manipulate their way through quoting from their initial years of successes and repeating “we had tried that in the past, it will not work” or worse, directors feel intimidated to question them.
Second then are Chief Financial Officers. Keep a sceptical eye on CFOs. Are they under the influence and grip of the CEOs? Are they independent enough and free enough to express their concerns besides of course their expected degree of competence and skill? I always admired strong and assertive CFOs that speak their mind on the performance of the business and its risks.
Third, non-executive directors must spend time in executive session, discussing and debating amongst themselves in the absence of executive directors and management. These are golden moments to express doubts, questions, incomprehensibility, anxiety and concerns with fellow colleagues. The perspective of non-executive directors is naturally different from those of executive directors. Intentions are most probably the same, but viewpoints vary. A group dynamic amongst non-executives helps in indicating problematic and risk areas, besides scrutinising executive performance and results free from a defensive attitude.
Fourth, board of directors have to take their own performance seriously. A board performance survey with all board members, or an annual meeting of directors for self-reflection contributes to a process of discernment on what we was done well and what can be improved. Conclude with a plan of action for the board for the next year on what can be done to improve its performance. Looking back a few years you can see the changes to the better that have been implemented such as more hours of training for board members, improved chairmanship skills, higher level of participation by certain members and more effective time keeping and use of board committees.
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.