When a CEO and mother board of company directors are completely control of an organization, it can seem to be invincible. But since Enron displays us, also innovative, remarkably respected corporations can crash and shed, with villain charges submitted against executives and investors network architecture strategies for IT systems submitting billions in lawsuits. The truth is that a small misstep in governance can lead to devastation and general public distrust.
Best mother board governance doesn’t exist, but boards can adopt best practices to improve their performance. Obtaining a high-performing board depends on aligning the roles for the executive workforce and the plank. While regulations are important tools, achieving alignment requires apparent understanding of the board’s part in get together its strategic needs and procurement of vital information for decision-making.
For example , a good practice is usually to clearly identify a matrix that helps administration understand if the board wants to be conferred with or enlightened about is important that rarely require aboard decision tend to be the main governance process (such mainly because proposals coming from committees). Similarly, a good practice is for a board to possess a system intended for managing its agenda thus members know whether the item they are taking into consideration is for information just, for action, or for tactical discussion and may focus on the most important items.
An alternative key is for boards to have powerful processes meant for identifying and exploring potential biases and blind spots, hence they are not caught off guard simply by unintended consequences of decisions. This can include establishing a culture of practical professional skepticism and ensuring that aboard members have courage to make red flags and demand acceptable answers, especially when working with mission-critical issues.