What (really) qualifies a person to take a seat at the boardroom table?

One of the most vexed issues when talking to people who aspire to company directorship is the simple question, ‘What does it take to be a director?’

There are few satisfactory responses. There are courses (some of which are very good and comprehensive) but none of these are accepted as proof that an aspiring director has any real potential. There are proponents of appointing ‘eminent persons’ such as successful politicians, business-people or academics in the hope that the good judgement they developed in reaching their positions of eminence will be the sort of judgement that will also serve a board…

The hard choices that non for profit boards need to make

Company directors on not-for-profit boards are often required to make substantial donations to the cause, or to elicit substantial donations from their network. Those that can’t or won’t become major benefactors are, more or less subtly, removed from the boardroom.

But, does this model sit well with current notions of directors’ responsibility and the professionalization of the role?

Bad outcomes for good people

All around the world there are stories (often in the form of court case judgements) about boards of charitable organisations who were found to have been inappropriately focussed on only a few aspects of governance — or worse still, operations — and…

Calls by the governance advisory community for the individual voting record of each director to be disclosed to shareholders are missing an important aspect of boardroom dynamics — joint and several liability.

Within a board each director should feel that they can, and will, be held to account for any, and all, of the decisions of the board. The prospect of a director saying, in effect, “Don’t blame me; I didn’t vote for it” is utterly dismal. Such a director would possibly also feel able to shirk responsibility for devising solutions to problems that ensued from a course of action…

If your board isn’t training to maximise company impact, what are they doing?

I was talking with a friend this afternoon about Usain Bolt.

Usain is arguably the best and fastest runner there has ever been.

He has made a massive positive difference in the lives of underprivileged children in the country of his birth, and also in the lives of many other people who have been touched and inspired by his greatness.

Can you imagine what the world would be like if, when Usain Bolt first started running, the coaches and staff at his junior athletics club had said something along the lines of “Usain is giving up his valuable after-school time…

More of the same won’t drive transformation: You need to do different things and do things differently. Here are 5 guaranteed ways to increase your board’s ability to make a difference to your company’s performance and the world in general:

1. Train your board — you can’t hope to play a winning game if your team members don’t know the rules or understand how best to play together.

2. Stop talking about ‘digital transformation’ and concentrate on making digital progress — that train is departing the platform and if you don’t run know you will miss it.

3. Get informed…

Who knows what 2021 will bring?

Not me!

I’m just making the best decisions I can, based on history, based on the best data available to me, based on my best analysis of what that all means and how it might impact the future.

Directors make decisions. Like me, they are deciding based on a combination of history and experience, current data, calculations and assumptions about the future, and a desire to make a positive impact.

Sometimes we have too much data and can’t extract the information, sometimes we can’t get the data we need, and sometimes we don’t understand…

We talk a lot about creativity in the boardroom. Every company claims to want a creative board. Every board wants to engender creativity in the executive ranks. Very few boards seem to manage this. With the possible exception of Qantas, most boards lack a marketing creative in the composition. Instead they draw their members from lists of the usual suspects; former CEOs — especially from that industry, a banker, an ex-audit partner, the obligatory lawyer, a major shareholder, someone with an Order of Australia. All very ‘establishment’; not very creative.

But is the boardroom environment one that would welcome and…

They may look the same but they are different.

There are important differences between boards and committees:

· A board acts as a team; the key aim is to maximise performance. A good board will be willing to upset certain stakeholders if the long-term value created by a course of action is greater than that of other potential courses. A board has a statutory duty to further only the interests of the company, although many directors consider this to be represented by the interests of the shareholders as a whole. Board members have no such duty to further the interests of any other stakeholder, although many directors consider stakeholder…

Don’t ‘Throw your new director to the wolves; a successful induction builds a successful board
Don’t ‘Throw your new director to the wolves; a successful induction builds a successful board

Never assume

Never assume that someone knows how to be a director. Never assume that they know how your board works best, or even what skills, knowledge, and abilities your board wants from them.

Every board is unique and so is every different director that may join your board. It follows, as a logical progression, that every induction program should also be unique. Build the program based on the specific needs and desires of your board, company and new director.

Induction should be a two-way process where the board learns more about the new director and the new director learns more about…

Why do governance recommendations never take into account the scale and stage of the company?

Most governance literature is written for large, mature, listed for-profit companies. Most companies do not fit into that category.

Following the natural lifecycle development curve and adapting governance to suit is a more appropriate course. However, companies are exhorted to aspire to, and then attain, a theoretical ‘best practice’ governance that often does not meet their needs at different stages of growth. Well intentioned directors often exacerbate this pressure by demanding that every board on which they serve adopt the practices that work well for every other board. Instead, they should adopt practices that suit the needs of the company…

Julie Garland McLellan

Julie Garland McLellan advises boards and directors on how to maximise board impact and drive legacy-building company transformations.

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