The role of the Board in organizations is one of oversight. Boards are charged with representing various stakeholder groups to ensure the organization fulfill their mission, vision, goals and objectives. A strong Board provides unparalleled guidance. A weak Board can lead (or oversee) an organization down a path to destruction. Given the significance of the role, there is much discussion about what a successful Board should look like.
As internal auditors, we support the Board by identifying, evaluating and reporting on the state of risk management activities. My question to professional auditors is this…During the course of providing audit services to the organization, have you ever evaluated the risks associated with the Board itself?
In his article “What makes a successful Board”, Carter Burges identifies 3 factors for a successful Board…Composition, Culture, and Commitment. Carter, a Managing Director at a corporate board and executive recruiting firm obviously knows a lot about the subject. If I may be so bold, I would like to add 2 more C’s to his list…Conscientious and Connected. So let’s take a look at all 5 C’s
Regarding composition, Burges states that Boards must be “comprised of directors whose combined collection of backgrounds, experience and skills are relevant to and therefore align well with what the company does, its strategy, opportunities and challenges.”
Burges further states that Boards “should possess a culture that is based on independence of thought, collaboration, honesty, mutual respect and transparency.” Furthermore, “egos and prima donnas… are seldom, if ever, welcome.”
Regarding commitment, Burges indicates that Board members are not only required to attend all meetings, but may be called on to mentor others, attend events or perform other related duties.
While the composition of the Board should include a wide range of experience, it is still important for Board members to have an extended network of resources that he/she can tap for information or advice. If necessary, a Board member may need to reach out to a contact for information for the purposes of understanding a function or to benchmark a process. In the non profit sector, Board members may be expected to support fund raising efforts by “introducing” friends and colleagues to the organization.
Dictionary.com provides the following synonyms for conscientious…just, upright, honest, faithful, devoted, dedicated. While conscientious may be a close cousin to commitment, I belive there is a need to view them individually when discussion Board members. It is entirely possible to be committed to doing the wrong things.
In summary, a strong Board should:
- Be composed of members with varied backgrounds, the more related to the organization the better
- Have a culture based on honesty and collaboration
- Be committed to go beyond the required “meeting” duties
- Make a conscientious effort to do the right thing
- Have or develop connection that will support their role on the Board
So have you evaluated your Board recently. Does your Board have the 5 C’s?
References “What makes a successful Board” (https://www.boardmember.com/blog_post.aspx?blogid=8589934638) by Carter Burges.