1) What makes an effective board?
An effective board must provide the organisation with a coherent and easily understandable mission. It should ensure that its vision and values are communicated and applied at all levels of the company. It is likely to play an important role in developing company strategy, and will rigorously test strategic proposals that are made to it by executive management. It will carefully monitor the performance of the executive team without intruding on their operational responsibilities, and may have to take tough decisions about the leadership of the company. Last but not least, it must ensure that the company has a constructive relationship with its shareholders and other stakeholders to whom it is ultimately accountable for the stewardship of the company.
2) What's the most effective board you've seen?
Often the most effective boards are those that you don’t see. They are quietly succeeding in steering companies towards their objectives. This is happening every day in those companies that are demonstrating sustainable success over the longer term. Boards often become high profile after things have gone wrong.
3) What's a good way to start creating an effective board?
A key issue is to recognise that a successful senior executive is not a ready-made director. A board member must take a much wider perspective than an executive with responsibility for a single operational area. Aside from appointing individuals with the necessary breadth of vision, training and professional development can play an important role. New directors should recognise that they need new skills and perspectives which have not necessarily been perfected in their executive careers.
4) Where can you network to meet people that would make an effective board?
National institutes of directors are obvious networking opportunities for people with an interest in the role of the board and the application of sound corporate governance. But effective directors can potentially emerge from many areas of life. It is a mistake to believe that an effective non-executive director should necessarily come from an executive management background. Consulting, the professions, academia, journalism and the public and voluntary sectors could all be fertile breeding grounds for aspiring directors.
5) What's next for you?
At the IoD we are committed to assisting directors in all aspects of their boardroom role. This involves disseminating best practice and providing practical advice to boards in both the private and public sectors. We are also working hard to ensure that government appreciates the perspective of business, and directors in particular, in their economic and commercial policies.