Articles written By Julie Garland McLellan
The Elephant in the (Board)Room
In almost every survey of boards, directors reveal that they are unhappy with the performance of one or more of their boardroom colleagues. They usually then continue to reveal that their board has done nothing to remedy the poor performance. For example, the 2018 PwC Annual Corporate Directors Survey showed that 45% of directors believed that one or more of their board colleagues should have been replaced. The McKinsey Global Governance Survey2 showed that 67% of directors served on a board where one or more directors should have been removed.
How Cost Effective is Your Board?
The job of the board is to direct. That involves making decisions about what to do, how to organise, and who to engage with to further the purpose of the organisation. Those decisions, if taken reasonably and well, will require management support. Increased demands for governance reporting and enhanced diversity will impact not-for-profit company boards in many ways. The three of the most feared are: a possible imposition of direct board costs as new independent professional directors demand recompense for the time, effort and risk involved in the role the increased cost of servicing a larger board, especially in the crucial first few months of each appointment when directors’ demands for information are often at their highest the ever growing costs of providing reports requested or expected by external stakeholders that are diligently reviewed by the board yet add little value to their decision-making.