Despite the best intentions, board members may be disengaged from their critical oversight responsibility. This is usually due to poor group dynamics like rivalries, dominance of a few directors and bad communication, which prevents the board from engaging the collective deliberation that is essential to effective decision-making.
It could also fail in establishing internal structures that contribute to the board’s performance assessment responsibilities. This typically means establishing officers or committees with the responsibility of gathering, analyzing and presenting evaluation results to the board for consideration. It is unlikely that the board will be able to effectively oversee these matters if left to the CEO and management team.
The board will likely miss the overall performance of its company if they don’t consider behavioural aspects when evaluating the contributions of directors. This usually results in a process that’s perfunctory and designed to only satisfy listing requirements or pay lip service to best-practice governance.
There are many ways that boards can improve web their performance and fulfill their fiduciary duties. Focusing on the quality of human interactions in the boardroom is a good first step. This can be achieved by making sure that the board is adaptable and resilient as well as strategic in its approach. It is also crucial to have the right mix of knowledge and abilities, which includes gender diversity. This allows the board to have a broad range of perspectives and allows them to more effectively tackle crucial issues. It also helps the board create an environment that promotes open communication and a variety of perspectives.
