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If we did the things we are capable of, we would literally astound ourselvesThomas Edison

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Boards That Lead

Boards That Lead

How to establish value-added relationships between company leaders and the board?

Author(s): Ram Charan, Dennis Carey, Michael Useem

Publisher: Harvard Business Review Press

Date of publication: 2013

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The value added by boards is often largely underestimated by top executives.  Indeed, boards have long concentrated on financial supervision. This trend is evolving, however, as the best-performing boards have moved beyond this role. With dedicated committees that serve as think tanks, they contribute to developing the strategic vision and propose novel insights and initiatives to leadership teams. Company executives, who often have little time to take a step back and look for major trends, appreciate these contributions—so long as they do not encroach on their operational prerogatives!

The authors demonstrate the importance of the role of board chairmen, since the performance of the board is closely linked to their leadership—their ability to get the directors to work well together and find the right mode of interaction with the leadership team. This is why former executives do not necessarily make good chairman. Some hang onto their operational expertise and remain attached to topics that should not concern the board of directors.

So what is the winning recipe for a value-added relationship between company leaders and the board? On the one hand, directors with complementary profiles who can move from a supervisory role to an advisory role when necessary. On the other, operational leaders interested in hearing other perspectives and who want to communicate transparently. This is not just a pipe dream, as many examples show!

A stimulating and concrete book benefitting directors and executives alike.