What makes a good Board great?
The key to effective board performance is ensuring that the people gathered around the Board table can leverage their experience to contribute in meaningful ways. A great Board, when operating akin to a high performing team, can provide ongoing collective value that is far greater than the sum of its individual parts.
For starters governance is not everything as Enron discovered! CEO Magazine picked Enron as one of the top five Boards in corporate America: "We are heartened by the overall corporate governance structure", and look what happened to Enron: you cannot legislate for Board performance! Also moving from "good to great" Board performance involves more than Board members attending the Board meetings and diligently reading all the Board papers. It's more than the sufficiency of its code of ethics, the diligence encapsulated in its assurance processes or the workings of the various subcommittees.
What makes a great Board is its ability to act as a "robust and effective social system", that is, Board performance is dependent upon its ability to handle challenge, both from within the Board and outside and strive to be more than the sum of its parts. That requires Board members to realise the uniqueness and the inherent contradictions in the role of the Board, the unique organisational contexts their Board faces, the role all Board members have in exhibiting leadership of the Board and recognising and managing the natural tensions and dynamics which exist within all boards. This requires ongoing Board evaluation and subsequent Board development.
A Board working at its best, leverages the wisdom and broad perspectives contained within its membership and brings this to bear to provide useful advice, act as a sounding board as well as a source of support for the organisation. Its membership is able to influence critical external stakeholders and act as ambassadors to the organisation. A great Board also ensures that the organisation is managed effectively, rather than existing to manage the organisation, as a Board which is too operational does not have the bandwidth to debate and focus on the strategic direction of the organisation. Strong Board performance goes beyond providing assurance, and adds real value to the effectiveness of the organisation. A great Board is not choked by meaningless data, but has access to useful information to inform its decisions.