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26 February 2024 / Essay
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Copy LinkThis article originally appeared on Directors & Boards. It is reprinted with the permission of MLR Media.
According to a recent survey of more than 600 C-suite executives, only 29% rated their board’s effectiveness as excellent or good; the majority said it was fair. Among those surveyed, there was a strong sentiment for higher board turnover: 34% thought two directors should be replaced and 34% said three or more directors should be shown the door.
But that level of near-term board turnover is likely unwise and impractical. Indeed, to the extent that there is a gap in board effectiveness, management can take a leading role in remediating it in far less drastic ways that will take advantage of, and not forfeit, the depth and breadth of experience in corporate board rooms.
The following four strategies can enhance board performance.
Increase attention to director orientation and education. Boards are being asked to address an array of topics that may be unfamiliar to them — from artificial intelligence to biodiversity to far-reaching European Union ESG disclosure regulations. The response to these challenges is not to populate the board with experts in each of these ever-emerging areas. Nor is it to hope that the board somehow educates itself. Instead, management should ensure there is a robust, ongoing director orientation and education program.
For example, according to that same survey of C-suite executives, 50% say their boards do not have a good understanding of the impact of technology on the company’s business. If such a deficit indeed exists, management is primarily responsible. And management should not be shy about bringing in the best available resources to help educate the board (and itself) about developments that are relevant to the business. In the S&
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