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Board Effectiveness: Promote Professional Standards for Director Performance
“With Dr. Henman's guidance, our search committee recruited an exceptional CEO candidate who dramatically impacted our organization's market capitalization in a matter of months. In addition, he quickly strengthened our global industry role, while driving enhanced levels of growth and profitability. Dr. Henman's insights were critical to our success.”
—Glenn Kalnasy,
Board of Directors
Chairman, Succession and Compensation Committee
Belden Inc.
Does your board perform or simply comply? Too many boards monitor the details of compliance almost to the exclusion of paying attention to the future of the organization. In other words, while you're dealing with the tactical issues, you may be ignoring the strategic role of the board and spending too little time on proactive work.
The Sarbanes-Oxley Act of 2002 caused CEOs and boards of directors to examine the way they do business. Now, more than ever, directors are taking their responsibilities seriously, speaking up, and striving for results; but, in many cases, the evolving relationship between the CEO and the board has not found the right symmetry. Perceptive directors and CEOs sense the tension.
They recognize that just as past practices have failed them, recent attempts to improve have not always succeeded either.To recruit new directors and quell shareholder unrest, directors need to understand their roles better, and they need to go beyond activity and conformity to goal realization.
Objectives
- Coordinate efforts among board members, especially members of the search committee, when the CEO needs to be replaced or board seats are vacated.
- Work with CEO and board to set strategies.
- Oversee the process of directors giving developmental feedback to the CEO.
- Learn ways to promote high professional standards for director performance.
- Evaluate directors.
- Improve communication with the CEO, media, educators, and investors.
Benefits
- Save the company millions of dollars by taking the guesswork out of CEO selection.
- Identify high potentials in the talent pool so compensation and development will help retain them.
- Receive guidance for realizing directors’ full potential, both collectively and individually.
- Save on search fees and hiring costs by creating a well-defined succession plan for the talent in the organization.