Five essential reads for new Board members
My essential reads differ in style and content but they all challenge us to rethink our assumptions about governance.
The questions they pose are helpful not only for new Board members in the private, public and not for profit sectors but also for experienced hands. Should leadership and governance move closer together? What should Board members be good at? What tensions do they face? How can Board behaviours be improved?
1) “Governance as Leadership: Reframing the Work of Non-profit Boards”
Written for non-profits, this book contains some important lessons for non-executive directors on any Board. Their argument is that Boards have become too concerned with “micro-governing” and need to reclaim influence over strategy, values and culture. For too many organisations “I have a good Board” has come to mean “I have a compliant Board”.
The authors reflect on the cottage industry that has grown up around Board improvement based on the idea that the solutions to poor governance are to be found in team building, payment for Board members, and clarification of roles and responsibilities. However, they argue the issue is more about the purpose of governance itself, the unsatisfying nature of much ‘official’ work and the rewarding nature of ‘unofficial’ work. They challenge us to rethink governance –
- “What aspects of the Board’s work are most important to this organisation’s success?”
- “What would happen if we (the Board) took 2 years off?”
- “What work would you miss if the Board decided not to do it or to have someone else do it?”
2) “Boards that Lead: When to Take Charge, When to Partner & When to Stay out of the Way”
‘Boards that Lead’ challenges the current approach to governance and suggests that “governing Boards should take a more active leadership of the enterprise, not just monitor the management”. The authors focus on building more engaged leadership in the Boardroom, articulating strong behavioural norms and improving the quality of Board conversations. They argue that “too often, directors remain one of the most valuable but least utilized of a company’s assets”.
Charan, Cary and Useem talk about four Board postures. The primary task of the Board member is knowing when to adopt each one.
3) “Owning Up: The 14 Questions every Board Member Needs to Ask”
Recognising that “governance now means leadership, not just over-the-shoulder monitoring and passive approvals” Ram Charan asks, “can we improve governance?” and offers some questions to help us do so. In fact, there are a lot more than 14 useful questions in this book and those related to Board behaviour are perhaps the most helpful for new Board members.
- Will they have the courage to engage in debate with a fellow director or CEO?
- Will they have the temperament to make their point and be willing to accept not all will agree?
- Do they have the humility to invite opposite viewpoints and be willing to change their minds?
Charan stresses the importance of group dynamics. Board effectiveness is not just about effective individuals. It also requires high functioning groups.
4) “Transformational Governance: How Boards achieve Extraordinary Change”
Transformational Governance is directed primarily at non-profit Boards. It argues that “truly exceptional Board leadership is not the norm” and looks at ways in which Boards can move from good to great. Through 14 case studies they track change as experienced by real life leaders: identifying the need for changes in governance, how changes were achieved and the lessons learned.
This book tracks the stages and processes by which directors and staff transformed their Boards.
5) “Roads to Ruin – A Study of Major Risk Events: Their Origins, Impact and Implications”
If you want to know how things can go wrong, this is the place to look. ‘Roads to Ruin’ investigates the role that Boards played in the highest profile corporate risk failures over the past decade. It’s not just about the private sector. Railtrack and the UK Passport Agency figure alongside the familiar stories of Northern Rock, Enron and Societe General.
It talks about the inadequacy of Boardroom conversations, the prevalence of ‘group think’, and the failure of the Boards to identify risks. It also highlights the significance of ‘soft’ skills (staff, style and shared values) as opposed to the so-called ‘hard’ skills (technical know-how, strategy, structure and systems) and poses the question whether the much talked about gender imbalance on Boards might have been a factor.
Summary available at http://www.cimaglobal.com/Documents/Thought_leadership_docs/Governance/Roads_to_Ruin