Tags

  • Published on

    Too many irons in the fire?

    Chairman Corporate Governance Effectiveness Governance Integrity Research Time Management

    Periodically I hear directors introduce themselves with "I'm a professional director". Sometimes, they add "I sit on NN Bboards", where NN could be as high as eight or even ten (boards). Wow. Presumably this means all of their income comes from director fees, and somehow more Boards is better or more prestigious. Am I impressed? Not really.

    The core role of any director is to maximise the performance of the company they serve. But how can they do this effectively if they spread their time across as many as eight or ten boards? Ten boards means a maximum of two days per company each month. In this scenario, how can any director possibly understand the issues and strategic options sufficiently well to contribute effectively around the board table? 

    Governing a company is demanding. It takes time to understand the issues. Can a director have too many irons in the fire? The stories starting to emerge in the media suggest the answer is a clear "yes".

  • Published on

    The Three C's of Effective Boards

    Accountability Chairman Corporate Governance Governance

    Earlier this week I attended a dinner function with 16 others, to hear a well-regarded Director and Chairman share his thoughts and experiences about leading the Board of a high-growth company. Amongst some great insights, he suggested three areas that Boards of high-growth companies need to focus on closely:

    • Capital: Boards need to ensure the company has sufficient capital to fund its growth plan. Otherwise, growth will be limited by available funds, and that inevitably means slower growth, and may mean important market opportunities are missed.
    • Capability: Boards need to ensure the company has sufficient people capability to execute its growth plans. That means recruiting a CEO capable of leading the company effectively, both now and in the future. It also means encouraging the CEO to recruit high capability people into key roles, lest the growth of the company outstrip the manager's ability to execute.
    • Culture: Driving growth is often hard work, so everyone needs to be on-board. The Board needs to ensure (through the CEO), that everyone is working to the same goal, and that they are signed up to an agreed set of brand/company values. People who can't sign up should be given the opportunity to "get off the bus".

    Sounds easy on paper! What do you think?