You are currently browsing the monthly archive for August 2010.
Roger Kenny, Vice Chairman of CTPartners Board Consultants writes about the importance of a strong and active board of Directors.
One of the most critical elements of responsible corporate governance is maintaining a strong and active board of directors. As some of the most highly respected directors and CEOs have expressed, the best and worst things that happen to a company begin with the board of directors. Yet all too often, the task of building a strong board is either overlooked or continually pushed down the list of corporate priorities.
The risks presented by a weak board are almost too numerous to list. Boards are charged with supporting a company and its executive team by engaging in critical evaluation, keeping focus trained on the strategic plan, and acting as a ready resource to partner with the management team in tackling key business challenges. Given the weight of that charge, the threat posed and opportunity lost when even one individual director is under-qualified for the role is considerable. Directors who don’t bring much energy or active contribution to the table can impede progress, as can directors who have held a seat for too long, beyond the time when they are making a new and significant contribution. And a single domineering director can squelch innovative ideas or stand in the way of those who want to ask tough questions.
As a group, a board must be prepared to challenge management assumptions and ask those tough questions. Diverse viewpoints among board members can prompt meaningful discussion. Yet too many boards are overly congenial, polite or just uncomfortable sparking debate.When directors primarily seek consensus, it can be difficult to make the necessary decisions.
Ineffective boards pose a tremendous business risk whether the board is affiliated with a public or private company, or a non-profit organization. In today’s challenging economic environment, no organization should shoulder the added risk of a weak board of directors.
Building a strong board is, quite simply, a business imperative.
To read more, click here.
