Where Boards Fall Short

Posted: December 14, 2015 by Robert Craven

Are our boards as good as they could be? I fear not. I fear they are falling short.

772 directors were surveyed by McKinsey:

• 34% agreed that the boards on which they served fully comprehended their companies’ strategies
• Only 22% said that their boards were completely aware of how their firms created value,  (McKinsey Improving Board Governance)

The crux of the matter:

Are all the members of your board (or senior management team) able to:

• Communicate and articulate the business strategy?
• Understand the financial implications of strategic decisions?
• Discuss how the business adds value?
• Share what makes the business different from others in the industry?

My experience is that many board members (not you!) struggle to give a half-decent definition of what ‘strategy’ or ‘marketing’ is.

So, how on earth are they expected to produce or recommend a decent strategy themselves?

Thought For the Day

• Do your board members know what strategy is and how to implement it?

More basically,

• Do your board members know what the job of a board member and how to carry out that role?

Action

A quick audit of your board processes, members and their activities should help you to understand where you are falling short. (And what is the consequence of your shortfall?)

I suggest you look at the McKinsey report Improving Board Governance as well as the HBR report Where Boards fall Short. Or look at this video on the Strategy Workout I deliver to the CEO/MD groups at Vistage, ACE and MD2MD.

Let us know how you get on and if you see an issue, let us help!

 

About the Author:

Robert Craven (@robert_craven) is an international Keynote business speaker, author, consultant and owner of The Directors’ Centre, a consulting and training company which helps owner-directors run the business they want to run.

His latest book Grow Your Digital Agency, which provides the business fundamentals that every growing agency needs to address, is now available.