Recent attention has focused quite correctly on directors and boards, and apparent corporate governance failures, leading to a series of well-intended reviews covering governance and regulatory issues.
While accepting good corporate governance is essential it is also appropriate to highlight boardroom behaviours are an essential component of best practice and that the absence of guidance on appropriate boardroom behaviours represents a structural weakness in the current system. We believe had that guidance on best practice been available and, more importantly, observed, some of the unfortunate consequences might have been less severe and that, in any case, prevention of a recurrence of the events of previous years is at least partly dependent upon guidance on appropriate boardroom behaviours being incorporated into company governance.
Clearly articulating governance is not sufficient. We need to have transparency on how we behave as of equal importance.
To improve on existing standards of behaviour in the boardroom, directors need to develop a greater awareness of, and commitment to, “best in class” boardroom behaviours as the means by which the board can collectively agree the business objectives of the company and a strategy for their implementation by executive management.
Improvements in behavioural best practice will also be built on a deeper understanding of the relevance of, and emphasis on, culture, vision and values – informed, in turn, by greater commitment to the importance of the relationship between issues of transparency, accountability, disclosure, trust and confidence.
These are business-critical areas as much for boards operating in steady state as for those managing a crisis, contemplating strategic change, or pursuing due diligence in relation to a proposed acquisition or other aspect of corporate activity.
High standards of rigorous and, occasionally, independent evaluation are required to increase boards’ effectiveness.
Generally, we believe that self-awareness of the board’s current state is a first step to improved individual director and whole board performance. However, we also believe it is important not simply to confuse more governance with better governance and this development approach for Boards and their Members is aimed at promoting better, as opposed to more.
In this regard our Board Review assessment and supporting process enables an independent perspective on board effectiveness, risks and development opportunities to re-position your board for future success.