Governance: What's up with Boards?

Maybe its just me. Maybe my expectations are too high. I keep looking at Boards of Directors stacked with 'high powered' directors and thinking - damn, there's gotta be more value here.

I see a couple of problems. First, I'm convinced too many Directors don't understand what their role is. First and foremost its governance - beginning with 'do we have the right CEO' and including accountability for financial, performance and regulatory elements of the business. To me it's stunning how many Directors simply seem to accept without asking, that all the elements of the business are being governed properly. If they do, they're crazy. I haven't seen many organizations yet where that is the case.

The second element of a Board's role - the one most Directors seem to relish - is the dreaded (by many CEO's) 'adding value'. How does a Director add value when he/she has no real life experience operating a company, marketing to the industry or using the company's products. That's where bad decisions get made and lots of time gets wasted - for everyone.

As a CEO, here are my thoughts on how a Board of Direrctors could add value to my organizations:

1. learn the business
2. meet the people in the organization
3. stop suggesting another corporate finance person or lawyer for the Board and find some industry leaders and successful entrepreneurs
4. put more time into governing than just showing up at Board meetings
5. read a book or two and take a course on governance
6. when things go wrong don't be patient, take action
7. when things go right, don't take credit, be appreciative
8. let me take you to lunch on a regular basis so we can get on the same page and creat real understanding

There's no way the best description of a Board of Directors should be 'necessary evil' or 'waste of time'. Boards aren't going away, governance requirements are getting more stringent and the challenges to running a succcessful operation keep multiplying. Boards and management teams need to clarify their expectations of each other to ensure that Board time isn't wasted time.

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