Articles written By James Beck
At the time of writing James was Managing Director of Effective Governance, an advisory firm that provides expertise and assistance on corporate governance, strategy and risk in Australia and New Zealand to a wide variety of clients including public and private companies, not-for-profit organisations, associations, co-operatives and government owned corporations.
Practical Ways To Improve Boardroom Dynamics
It is now widely recognised that board dynamics are a central driver in producing strong organisational outcomes. This involves not only the relationships among board members but also between the board and senior management. However, this can a difficult area for boards to deal with even when dysfunctional relationships are hindering good governance and impeding sound decision‑making. The following are some practical ways in which a board can reinforce or improve its dynamics.
The Touchy Subject of CEO Dismissal
Firing the CEO can be one of the most difficult decisions a board can make – it will also be among the most critical. However, many boards, including those of non-profit organisations, will resist bringing up the need to fire their CEOs, while other boards will be far too quick to fire their chief executives. There are many reasons a board may be slow to act when it comes to CEO dismissal:
What Does an Innovative Board Look Like – Value Creating
In an increasingly complex and uncertain world, change is happening faster and more often than ever before. As an example of major change in the Australian not-for-profit sector, the National Disability Insurance Scheme (NDIS) has transformed the way people with disabilities are supported, with the move away from the block funding of disability services by government towards a system in which individuals with a disability have a greater choice and control over the services they purchase.
Boards Driving Value: A How-To Guide for Your Board
One of the greatest challenges for boards and directors lies in how to define an ‘effective’ board. The different contexts in which boards operate (e.g., different legal structures, not-for-profit, family owned, etc.) and the various constraints they face (e.g., constitutionally imposed constraints, institutional forces) results in boards undertaking different tasks and having different attributes. In short, board effectiveness is contingent on the broad environment in which the organisation finds itself, and there are alternative paths to effectiveness.
Dealing with Disputes in the Boardroom
In accordance with their fiduciary duties to the organisation, directors have a responsibility to implement good governance. The board is expected to operate collegially. Each director brings to the boardroom their own particular skills, knowledge and experience, and has a duty to apply that skills, knowledge and experience. An effective board seeks to stimulate the flow of ideas, identify key issues, consider alternatives and make informed decisions. To do so requires often-vigorous debate, which can sometimes turn into conflict, but there are many more reasons why issues might arise.
What is Your Director Personality?
There is a growing understanding that board behavioural dynamics are a central driver in producing strong organisational outcomes. Every board will demonstrate different behavioural dynamics. These differences are both between boards and within the one board over time. However, boardroom dynamics is often a difficult area for boards to address when they go awry. Four important drivers impact board behavioural dynamics: The specific issues facing the board at the moment; The impact of both the organisational and board cultures; The individual personalities of the chair and the CEO and how their personalities interact; The personalities of the directors and, to a lesser extent, the roles and personalities of the company secretary and members of the senior management team such as the chief financial officer.
The Path to Effective NFP Board and Director Evaluations
In the past, board performance in the not-for-profit (NFP) sector was seen to not need to be at the same standard as that required in the commercial sector. Thankfully, this view is changing, as it is far from the truth. Whether an organisation is focused on obtaining a profit or not, its governing body (whether it is a board, council or other grouping) should be adding value to that organisation, not hindering organisational performance.
What Does Good Governance Look Like?
The definition of Good Governance is akin to the definition of hard-core pornography offered by Justice Potter Stewart1 - we cannot define it, but we ‘know it when we see it’. The high levels of governance and accountability required of both the private and public sectors in Australia are now being demanded in the not-for-profit (NFP) sector. While there does exist a view that governance standards in the NFP sector are not at the same standard as required in the commercial sector, this is far from the truth.