Many companies are not getting full value from their boards, often because of weak or underutilized directors. A set of best practices can help companies avoid such waste at the top.
Many corporations are failing to obtain full value from their boards. This lost opportunity occurs not only in dysfunctional organizations but also in companies that perform well and are market leaders. While many boards unfortunately have weak or even incompetent members, even companies with highly qualified directors often can fail to fully tap the skills and experiences of those individuals. It doesn’t have to be this way. Based on a recent comprehensive study of board reviews and our collective experience of more than 60 years of assessing senior managers and board members, we believe that a set of sound practices for creating and running an effective board can help companies avoid such waste at the top.
Lifting the Lid
Over the past five years, we have performed almost 100 board reviews (see “About the Research”). The businesses involved were based on all continents and in all major industry sectors and covered a wide range of organizations, from large to small, both publicly listed as well as government and family owned. Based on the data collected (see “What Boards Know That Companies Don’t.”), we are convinced that most boards have five key problems.