Do you have a dysfunctional board that is just not performing well?
Jo Haigh gives an overview of what you should do if your board’s performance is lacking.
What should you do if your board isn’t performing well? Don’t forget, a board isn’t a team. A management group is a team, but a board is a group of independent people – and that is the law by the way. Each director has to act independently. When they go out of the room with a joint decision, that is a different thing – a united front is very important. but what happens when they go out of the room and are completely dysfunctional? What is wrong? Is it personal? Is it business? Are they stale? Whatever it is, you need to take action and that can be done in a variety of ways.
Under the UK Corporate Governance code, public companies have to evaluate their board every year and every three years they have to bring in a third party to do that. This can be done simply by means of a questionnaire, or more complexly by third party board reviews. A third party will have one to one meetings with all of the directors and an individual debrief with the chairman of the board. Ultimately, this will culminate in a ‘what do we need to do to get this board back on track’ discussion. It could be processes, it could be purpose, but it is likely to be people. It is important that what comes out of this is an action plan for you to implement and a sponsor to make sure that those actions are carried out.
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