Howzat – a representative board that works well
— Governance Matters (@GovernanceMatt) March 17, 2017
We all know that representative boards bring challenges related to partisanship but they pale into insignificance when compared with the troubles that arise when the representatives don’t enjoy equal status at the boardroom table.
Just ask the International Cricket Council (ICC) who, about three years back, allowed something of a coup d’état – orchestrated by the so-called ‘Big Three’ of India, England and Australia – to occur.
They would stand alone, above and more important than the other seven full members, presumably as beacons of benevolence.
Boards are no place for sectarian sentiments
— Governance Matters (@GovernanceMatt) September 16, 2016
You’ll recall our last blog touched on the first of new British PM Theresa May’s two targets for a corporate governance overhaul – that of making shareholder votes on pay binding.
We now shift our focus to the second, and equally, ‘un-Conservative’ thrust that’s generally more aligned with the trade union movement… getting employees on to company boards.
Ms May may have lost the plot on this one, though. That’s my humble opinion.
We nominate for greater independence
There’s an inescapable truth – or what Al Gore might have branded an ‘inconvenient truth’ – that when the best skilled and equipped are in charge, the chances of everything running like a well-oiled machine are greatly enhanced.
— Governance Matters (@GovernanceMatt) July 20, 2016
And we’ll only get these when factors like impartiality and objectivity take centre stage and bias, prejudice and self-interest are pushed to the wings and beyond!
Which brings me to the vital role the nominations’ committee plays in increasing the chances of an organisation – be it a not-for-profit or a commercial entity – purring along smoothly.
When ignorance can be anything but bliss
We spoke last time about representative boards and the self-interest that can inflict them but equally disturbing is the role ignorance can play in both the creation and ongoing preservation of these boards.
The ignorance, of course, seldom comes from the individuals who sit on these boards.
Rather, it’s more likely to stem from the architects, those who establish them, often with little regard for how costly and ineffective the structure they are creating might be.
What the ICC is doing is just not cricket!
We’ve spoken about representative boards and the many challenges they face but as these seem to be akin to the gift that keeps giving, it’s timely to take another look.
When we last explored the subject, we concluded that representative boards – those national or international boards made up of representatives from the member states or countries rather than people best qualified for the tasks at hand – invariably carry baggage.
Self-interest and personal agendas immediately spring to mind. It’s very hard to think bigger picture when you’re answerable to your state or country.
When vested interests should be of no interest
When board appointments are based on criteria other than skills, you’re just about guaranteeing that one of two things will happen – at best, you’ll deprive the board of a fighting chance to do the very best it can for the organisation in question; at worst, you’ll ensure that it will all end in tatters and tears.
That boards still tend to select directors on other grounds suggests that the notion vexes some.
But it is an inescapable truth…after all, logic tells us that when the best equipped (read skilled) are running the show, the chances of everything running smoothly are greatly enhanced.