Boards that aspire to greatness establish a culture of integrity, built on a strong ethical foundation and are rigorous in their endeavour to add value.
Create a healthy robust decision-making culture; one that creates a sense of loyalty among various stakeholders. Incorporating in their governance framework is a comprehensive and forward-looking risk oversight philosophy which includes developing a risk culture, an agreed appetite for risk, maturity assessments as well as aligning risk, strategy and disclosure activities.
Board composition is built not only around size and diversity of talent but designed with the organisation’s sustainable future in mind. Succession planning is an agenda item and boards conduct director assessments regularly. Similarly they encourage board members to continually up-skill.
Great boards demand a view of the bigger picture, make sure they understand what is the real problem and avoid focussing on ‘silo’ solutions.
Great boards look forward rather than just responding to changing conditions, analyse what drives values, stress-test alternative strategies and allocate/reallocate resources accordingly.
Great boards aspire to create a sound foundation by deliberating about their processes; for example, seeking to remove any bias from the decision-making processes.
Great boards have directors who are all over the numbers and data’ carefully monitoring the financial situation and understanding the potential ramifications of them. Compliance is a non-negotiable item.
Great boards have a Chair chosen on his/her ability not popularity.
Great boards work collaboratively with managementto create direction and goals that are clear to all and are measurable. Everything that occurs within the organisation is linked to the desired outcome.
Read other articles to help you govern better.
How do you know when you don’t have effective governance?
Read about the danger signs and call Bev or Nick for a confidential consultation on how to improve your board.
Dr Bev Edlin and Nick Dangerfield are the executive directors of Boardroom360.
Being a director brings with it responsibilities and accountabilities. Bev and Nick believe more needs to be made of these imperatives to not only improve governance but to protect the rights and entitlements of shareholders.
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