Jul 17, 2024
How to Elevate Board Performance Problems
Board members may become disengaged despite their best intentions. This is often a result of poor group dynamics–rivalries or dominance by a few directors, and poor communication that hinder the board from engaging in the collective decision-making process essential for effective decision-making.
The board may also not have the proper internal structures that allow it to carry the responsibilities of assessing performance. It is common to create officer roles or committees, which are responsible for collecting and analyzing the results of evaluations, before giving them to the board for review. It is important to note that entrusting these tasks to the entire board, or even confining them to the CEO and management team is unlikely to provide effective oversight.
The board will likely be unable to assess the overall performance of their business if it fails to consider behavioural aspects when evaluating the contributions of directors. This can result in a superficial process that is conducted to satisfy listing requirements or to provide lip service to good governance.
There are many ways that boards can enhance their performance and fulfill their fiduciary duties. Focusing on the quality of human interactions in the boardroom is the first step. This can be accomplished by ensuring that the board is flexible, resilient and strategic in nature. It is also vital to provide the right mix of abilities and experiences and gender diversity. This allows the board a greater variety of perspectives to be gained and allows them to better address crucial issues. This helps the board create a more collaborative environment that encourages open communication and different viewpoints.
