Rethinking the Board . . .

(Note:  the following is an excerpt from my forthcoming book: A Primer on Corporate Culture for Boards and Non-Executive Directors)

“In life and business, there are two cardinal sins. The first is to act precipitously without thought, and the second is to not act at all”. –   Carl Ichan

Perhaps the most difficult job in business today is that of non-executive director and member of the Board of Directors of a publicly traded company.  In this time of great economic uncertainty and business confusion it is easy for a member of the Board to feel like “neither fish nor fowl”.

That is to say they must act as advisors and coaches, not allowed on the playing field but still held accountable for the score, as well as being responsible for potential illegal acts committed by the company. Add to that the public outcry over executive compensation during times of business failure and bailout and it’s the wise individual who will think long and hard before accepting a Board position. And the current global financial crisis has added a significant challenge to the Board, one in which the solutions are anything but clear and obvious.

And the uncertainty and confusion at board level is beginning to show. According to a recent McKinsey & Co report, less than half of the 186 board members surveyed say their boards have reacted effectively to the global economic turmoil. Not knowing what to do, or how to do it, has kept many boards from being proactive in helping their companies deal with the current mega-crisis.

There are no cut and dried formulas and few black or white choices for boards to follow. There never were, but today’s pace of global business means boards have to respond quicker. The luxury of time to mull it over or decide next quarter is no longer available. So how can the CEO and Chairman guarantee that the board is fully functioning and effective?

Selection has been one of the key routes to building effective boards and will always remain important. But selecting the most experienced players doesn’t mean the team will be effective. Look at the poor record of national sports teams. English National Team football is just one example – the best players from individual teams come together to play for their nation. More often than not the fans are disappointed because their superstars can’t seem to play as a team, and when they get soundly defeated by a third rate country, the poor teamwork is clearly evident. We believe some of the same characteristics happen on the most “stellar” boards – great experience but poor teamwork.

Board Teamwork?

Why should teamwork among the board be important? We are not referring to the elements of teamwork that most people understand – collegial warmth, high spirits and group hugs! The real elements of teamwork that turn a collection of individuals into an effective team are much more hard edged – open and honest dialogue, continuously challenging ideas to arrive at the best solution, pressing each other to deliver their best, not yielding to the easy approach, breaking through deadlock to achieve alignment, understanding each other’s strengths and weaknesses so they can work together effectively. These are the “hard” skills of effective teams and we believe there is work to be done to help boards be even more effective.

No one of us is as smart as all of us.  ~Ken Blanchard

When was the last time your board had a Team Alignment Retreat? If you can’t get them to take the time out for a 2-day event, then you may have the wrong members.  Is their motivation to help the company be successful or collect board fees?  Board positions should be hard work, not the perks of elder statesman.  Board members should be passionate about the product, employees and the company.  And like a good team, the whole should be greater than the sum of the parts.

Quality starts in the Boardroom.  – W. Edwards Deming

Written and Posted by: John R. Childress

Senior Executive Advisor on Leadership, Culture and Strategy Execution Issues,
Business Author and Advisor to CEOs
Visiting Professor, IE Business School, Madrid

e: john@johnrchildress.com
Twitter @bizjrchildress

Read John’s blog,  Business Books Website

On Amazon: LEVERAGE: The CEO’s Guide to Corporate Culture

Read  The Economist review of LEVERAGE
Also on Amazon:   FASTBREAK: The CEO’s Guide to Strategy Execution

John also writes thriller novels!

About johnrchildress

John Childress is currently Visiting Professor in Strategy and Culture at IE Business School in Madrid and a pioneer in the field of strategy execution, culture change, executive leadership and organization effectiveness, author of several books and numerous articles on leadership, an effective public speaker and workshop facilitator for Boards and senior executive teams. In 1978 John co-founded The Senn-Delaney Leadership Consulting Group, the first international consulting firm to focus exclusively on culture change, leadership development and senior team alignment. Between 1978 and 2000 he served as its President and CEO and guided the international expansion of the company. His work with senior leadership teams has included companies in crisis (GPU Nuclear – owner of the Three Mile Island Nuclear Plants following the accident), deregulated industries (natural gas pipelines, telecommunications and the breakup of The Bell Telephone Companies), mergers and acquisitions and classic business turnaround scenarios with global organizations from the Fortune 500 and FTSE 250 ranks. He has designed and conducted consulting engagements in the US, UK, Europe, Middle East, Africa, China and Asia. Currently John is an independent advisor to CEO’s, Boards, management teams and organisations on strategy execution, corporate culture, leadership team effectiveness, business performance and executive development. John was born in the Cascade Mountains of Oregon and eventually moved to Carmel Highlands, California during most of his business career. John is a Phi Beta Kappa scholar with a BA degree (Magna cum Laude) from the University of California, a Masters Degree from Harvard University and was a PhD candidate at the University of Hawaii before deciding on a career as a business entrepreneur in the mid-70s. In 1968-69 he attended the American University of Beirut and it was there that his interest in cultures, leadership and group dynamics began to take shape. John Childress resides in London and the south of France with his family and is an avid flyfisherman, with recent trips to Alaska, the Amazon River, Tierra del Fuego, and Kamchatka in the far east of Russia. He is a trustee for Young Virtuosi, a foundation to support talented young musicians. You can reach John at john@johnrchildress.com or john.childress@theprincipiagroup.com
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