How can boards deliver value?

Research shows that the value board directors offer is not acknowledged by management. The contribution of UK board directors was downgraded by over 40% by their management. In the US, the level of inhibition and reluctance to confront known and pressing concerns was particularly worrisome. Similarly, the value and contribution of South African and UAE directors was downgraded by over 80% by their management.

 Yet certain boards were identified as delivering value as a result of adopting five critical disciplines:

  • Leadership – The leadership of the chairperson is fundamental in shaping how the board delivers value. Recognising the competitive advantage and elements of differentiation for the enterprise and then skilfully fostering a shared view between board and management as to how to make that extra contribution, typified outstanding leadership.
  • Delineating boundaries – Once clear on how to proceed, the next step is to delineate the roles, tasks and contributions of the board and management. Highly dynamic markets do not allow for a generic distinction between board and management. The smart board determines the contribution needed according to market challenges.
  • Deep engagement – To make that telling contribution, the board needs to be in tune with what is happening in the organisation. In doing so, it is clear where the fault lines lie and what needs to be done.
  • Evidence – Capturing relevant evidence, particularly at the critical fault lines, on how the organisation functions makes the case for what to do to improve. Irrefutable evidence from the board is difficult to ignore.
  • Culture – In the high-performing enterprise, the management owns the strategy but the board owns the culture. The task of the executive team to drive the strategy is substantially enabled when the board raises tangible concerns. Derailment is minimised.

 Regretfully less than 20% of boards globally make the five disciplines a habit. The remainder, caught in unproductive interactions, rarely ask ‘how can we deliver value?’

 

Andrew Kakabadse will be launching the Board Directors Programme at Henley Business School in June 2015. Click here for further details.

 

Professor Andrew P Kakabadse

Professor of Governance and Leadership

 Andrew joined Henley Business School in July 2013 after more than 30 years at Cranfield School of Management, Cranfield University, where he finished as Professor of International Management Development in December 2012 and was awarded the honour of Emeritus Professor.

Andrew has been ACT Visiting Professor at the Australian National University, Canberra, and was Visiting Professor at Hangzhou University, China; Visiting Fellow at Babson College, Boston, USA; Honorary Professorial Fellow at Curtin University of Technology, Perth, Australia; and the H Smith Richardson, Jr Visiting Fellow at the Centre for Creative Leadership, North Carolina, USA, 2005/06.

Andrew is currently Visiting Professor at the University of Ulster; Visiting Scholar in Residence at Thunderbird School of Global Management, USA; and Adjunct Professor at Southern Cross Business School, Australia.

He is a Fellow of the International Academy of Management, Fellow of the British Psychological Society and Fellow of the British Academy of Management.

Andrew has consulted and lectured in the UK, Europe, USA, SE Asia, China, Japan, Russia, Georgia, the Gulf States, India and Australia. He was also Vice-Chancellor of the International Academy of Management and was Chairman of the Division of Occupational Psychology, British Psychological Society, 2001.

 His current areas of interest focus on improving the performance of top executives, top executive teams and boards, excellence in consultancy practice, leadership, corporate governance, conflict resolution and international relations. His top team database covers 21 nations and many thousands of private and public sector organisations. The study of the strategic skills of top teams has now extended into Japan, China, Hong Kong and the USA. Andrew is currently embarking on a major world study of boardroom effectiveness and governance practice. A number of governments are participating in this study, including ministers from the UK government. He has previously been awarded a £2 million research grant to examine governance and leadership in the private sector and with governments.