Shared Problems Hold Corporate Boards Back
While every company faces unique challenges, giving executive boards unique matters to oversee and attend to, those boards also fall prey to a few common issues. IEDP recently pointed out that there are 10 major concepts determining whether directors will be able to exert control over their respective organizations. (Aug. 8)
Three of the 10 factors relate to the duties and personalities of the individuals on each board. The amount of work directors have to accomplish for their outside roles can take time away from board participation, as can unusually complex demands from those other jobs. Furthermore, board members' backgrounds can be very different from their roles on the board, limiting their industry expertise.
Another five important factors relate to how the directors work together: A large and ponderous scale, lack of frequent meetings, clashing perspectives and a potential need to defer to the CEO can hold board members back from providing governance, as can a CEO who insists on taking control.
Finally, companies that are particularly large or dominated by complex internal structures can prove hard to govern. These difficulties and the ones above can't simply be wiped away, so effective boards learn how to acknowledge and work around them.
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