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Insync – employee, customer and board survey and consulting specialists – has released new research: “Taking your board from good to great: the best 101 ways to improve”.
The Insync report is based on 856 suggestions for improvement made by 345 directors, gathered over six years till 31 December 2011. These directors serve on 47 boards of some of the largest and most important organisations in Australia and New Zealand. They sit on boards of ASX listed companies and other organisations with assets or annual turnover exceeding $500 million each.
Nicholas Barnett, Insync CEO and author of this research said: “Interestingly, the need for more robust discussions at the board table was one of the important themes to emerge. Great boards have healthy debate on key issues before making important decisions involving strategic issues and risk. Boards can’t carry out their oversight effectively without rigorous and robust debate. In the current uncertain, complex and fast changing economic environment, this research suggests that many boards need to lift the bar in this area or they will be exposed.”
The importance of the relationship between the chair and CEO was another key theme in the research.
“To achieve high performance, the board and management must be on the same page particularly in relation to the long-term direction, purpose, strategy and values of the organisation. This is one of the prerequisites for engaging employees at all levels within the organisation and building sustainable high performance.
“Another issue that came out relates to a tendency for ‘group-think’ or ‘the impulse to nod sagely’. This highlights the importance of different perspectives and openness to minority opinions. Where there’s group think, directors are less likely to discuss the possible implications of important decisions and the costs and change management required to implement plans.
“We have previously published research that shows gender diverse boards add more value than male dominated boards. Gender diverse boards make fewer assumptions, are open to a wider range of different perspectives and are less likely to simply agree to important decisions without appropriate enquiry and discussion,” said Barnett.
Some of the report’s other main suggestions were:
- board papers must focus more on the issues that are challenging management and be more forward looking
- the board must make a serious commitment to properly assessing the performance of the CEO in a documented process involving all non-executive directors
- boards must seek to understand and then commit to genuine high organisation performance, i.e. via independent research
- boards need a greater level of involvement/ownership on setting the three to five year strategic direction
Over half of the suggestions relate to the processes boards use to organise themselves, their meetings and their information flow.
“It was also clear that boards have a healthy unease about whether they are allocating the appropriate amount of time and effort to right priorities,” said Barnett.
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“Taking your board from good to great: the best 101 ways to improve”
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