Turbulent times require a greater focus on board effectiveness

Abstract

Purpose

This paper seeks to explore the necessary considerations in assessing and improving board performance in a Fortune 50 organization facing complex strategy execution challenges.

Design/methodology/approach

Face‐to‐face interviews with all non‐executive directors, the CEO and other senior executives were used to conduct a detailed evaluation of board performance, so as to highlight any potential areas of execution or governance risk and underperformance arising from gaps in competence, process or culture. In addition, analysis was carried out of overall board effectiveness and of individual board member contribution using detailed 360‐degree and aggregate questionnaires completed by board and key members of the management team. Further insight was gained from detailed benchmarking against global peers.

Findings

The work highlights that for a board to be a valuable differentiating asset to a company it is vital to balance the governance and oversight role of the board with a supportive and partnering relationship with executive management. This requires that a board should possess the necessary depth and breadth of experience to gain the respect and trust of the executive; that the chairman and CEO should define a contract that describes the nature of the relationship and the division of responsibilities between executive and board; and that the chairman should strive to create an open and challenging dynamic and constantly seek to improve board behaviors and interaction.

Practical implications

It sets out clear objectives in building boards with complementary skill sets and experience and in embedding a culture of continuous self‐assessment and improvement.

Originality/value

Strategic HR practitioners are encouraged to consider the value of the board to management as a differentiating asset for the organization.

Citation

Petri, T. and Soublin, R. (2010), "Turbulent times require a greater focus on board effectiveness", Strategic HR Review, Vol. 9 No. 4, pp. 20-27. https://doi.org/10.1108/14754391011050379