Unique Dynamics, Common Issues

February 19th, 2013 | By

As NACD general counsel and head of Board Advisory Services (BAS), I’ve gained tremendous insight interacting with all types of boards from startups to the top of the Fortune 500. Each board comes with its own unique dynamics, incorporating differing personalities, skill sets, advantages, and obstacles. But despite these differences—and regardless of the size and sophistication of the board—there are several common issues with which most boards are grappling.

While I’ve seen just about every scenario one could imagine, BAS is typically engaged for the following reasons:

  1. The company has reached a turning point in its strategy, which has created tension and a need for alignment with the board and management.
  2. The board is struggling with directors’ extended tenure on the board, which has created a stale environment and an obstacle to fresh thinking.
  3. Often related to the second point, the board is wrestling with the thorny issue of succession planning and how to deal with underperforming directors.
  4. The board is composed of strong, experienced directors, but management does not feel they are as engaged as they could be and are not bringing all their skills to the table.

In each situation I’ve found that our clients, despite facing significant pressure points, all have the desire to improve. Even the most sophisticated boards are willing to admit they don’t have all the answers. As such, they bring NACD—as an objective third party—into their boardroom to assist in identifying steps for improvement.

In my next posts, I will drill down further into these common issues. How are companies dealing with underperforming directors? What new succession planning techniques are working? Does extended tenure affect director independence, engagement levels, and the creation of fresh ideas? How can the board and management team be more effectively aligned?

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