Boardroom culture has found itself under increased scrutiny in recent years, with many companies being criticised for having boards which are not diverse or balanced enough.
But it’s not just the composition of boards which needs addressing. The behaviour of boards, as well as the company values and strategy which they play a vital role in setting, also require closer examination.
All stakeholders, whether they are employees or customers, look to companies’ boards to champion their ethics, values and integrity. Basically, the board acts as a window into a company’s culture and in the wake of the financial crisis it is becoming increasingly important that they give a positive impression.
We take a closer look at some of the areas companies need to pay particular attention to.
Who’s on the board?
Exactly who sits on companies’ boards has never been a more topical issue. Companies are coming under pressure to ensure that their boards are diverse and include people from a range of different backgrounds, with different ideas and opinions.
However, bringing people with a mix of different experiences and skills to board level brings with it its own challenges and it is advisable that any newly-appointed directors are provided with additional support to help them adapt to the role and gain the confidence to impact decisions.
What are its values?
The board not only agrees the company’s core values, all members are expected to exhibit them, and hold their colleagues accountable if they are not doing the same. The Chairman should take the lead in this and provide feedback to the board regarding how they are adhering to the company’s core values.
An effective board will also ensure that the company values are applied throughout the organisation by implementing policies, processes and other tools.
A clear strategy
A clear strategy is essential for a successful company, and an effective board will bring its collective knowledge of both their organisation and the wider industry together to establish a clear business plan. This plan should be evaluated regularly, with performance compared to the company’s strategic objectives and the overall business aims for the year at each board meeting. The meetings should also provide opportunities for the risks and rewards of various strategies to be analysed and evaluated.
If a board is to be truly effective, all of the members must work together and build honest and open relationships with their fellow board members and executives. While the Chairman plays a pivotal role in encouraging all members to be approachable and supportive of one another, it is also down to individual Directors to take a proactive approach to their role and contribute to discussions and challenge ideas.
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