Board members may become disengaged, regardless of their best intentions. This is often due to poor group dynamics, like rivalries, the dominance of a few directors, and poor communication which hinders the board from engaging the collective deliberation that is essential to effective decision-making.
It might also fail in establishing internal structures that are suited to the board’s performance board of directors conflict of interest evaluation responsibility. It is commonplace to establish committees or officer roles that are responsible for gathering and analyzing evaluation results before giving them to the board for consideration. It is unlikely that the board will be able to effectively oversee these aspects if they’re given to the CEO and management team.
The board is likely to misunderstand the overall performance of their company if they don’t consider behavioural aspects when evaluating the individual director’s contributions. This results in a perfunctory process that is carried out to satisfy listing requirements, or to give lip service to good governance.
There are a variety of ways boards can boost their performance and ensure they’re meeting their fiduciary responsibilities. The starting point is to concentrate on the quality of interactions between people in the boardroom. This can be achieved if the board is flexible and resilient, as well as strategic. It is also vital to provide the right mix of expertise and experiences, including gender diversity. This allows the board to have a greater variety of perspectives to be gained and enables them to more effectively address important issues. This helps the board create a more collaborative environment that encourages open dialogue and a variety of perspectives.
