When a CEO and mother board of owners are entirely control of an organization, it can seem to be invincible. But as Enron displays us, also innovative, highly respected businesses can crash and burn off, with arrest charges submitted against management and shareholders data analytics in IT performance monitoring filing billions in lawsuits. In fact that even a small misstep in governance can lead to tragedy and general public distrust.
Perfect plank governance doesn’t exist, nevertheless boards may adopt best practices to improve their performance. Reaching a high-performing board depends on aligning the roles for the executive workforce and the board. While plans are important tools, achieving alignment requires very clear understanding of the board’s part in conference its tactical needs and procurement of peaked information for decision-making.
For example , a fantastic practice is to clearly specify a matrix that helps management understand when the board needs to be conferred with or educated about is important that would not require board decision but are section of the governance method (such while proposals from committees). Likewise, a good practice is for a board to have a system just for managing their agenda and so members understand whether the item they are considering is for information only, for action, or perhaps for proper discussion and can focus on the main items.
One more key is for panels to have effective processes meant for identifying and exploring potential biases and blind spots, so they are not caught away guard simply by unintended outcomes of decisions. For instance establishing a culture of practical specialist skepticism and ensuring that board members have the courage to improve red flags and demand acceptable answers, especially when dealing with mission-critical issues.
POSTED BY
John Avery
18th December 2023
