Scrutiny of boards and their performance has never been more intense. This scrutiny has intensified in response to the financial crisis of 2008-11 and the failure of bank boards to effectively oversee their institutions. Since 2008, in contrast to previous episodes where a string of corporate failures attributed to board performance resulted in reports, reforms and
recommendations, there have been additional demands and new expectations laid at the door of boards. These include setting executive remuneration, ensuring gender diversity, the degree to which board members have the right skills and are independent.
Boards are important: they sit at the apex of the organisation and are accountable for its overall corporate governance.
When boards get their corporate governance responsibilities right this contributes to business performance and enhances competitive position.
When boards get things wrong, it can result in negative press coverage and potentially fatally damage the company’s existence. In spite of this attention, boards still struggle to understand what makes for, and how to achieve, an effective board.
In our opinion, an effective board is a cohesive and organised group with complementary experiences, whose members are mutually accountable for achieving a common purpose and outcomes through collaborative behaviours and debate.