Despite their best intentions, board members can occasionally become disengaged from their critical oversight obligations. This is often due to poor group dynamics like rivalries, the dominance by a small number of directors, and poor communication which prevents the board from engaging in the collective decision-making process that is essential to effective decision-making.
It might also fail in establishing internal structures that are suited to the board’s performance assessment obligations. It is typical to establish committees or officer roles whose duties include gathering and analyzing the results of evaluations, before making them available to the board for consideration. It is highly unlikely that the board will be able to effectively oversee these issues if they are left to the CEO and the management team.
The board is likely to misunderstand http://boardroompro.net the overall performance of their company if it does not include behavioural factors in evaluating individual directors’ contributions. This results in a routine process that is carried out to satisfy listing requirements, or to give lip service to good governance.
There are many ways that boards can improve their performance as well as fulfill their fiduciary obligations. Concentrating on the high-quality human interactions in the boardroom is a good first step. This can be achieved when the board is flexible and resilient, as well as strategic. It’s also important to offer the appropriate mix of skills and experiences that include gender diversity. This helps the board have a wider array of perspectives and better solve the pressing issues. It also helps the board to create an environment that encourages open communication and a diversity of viewpoints.