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Managing the board

This article was previously published on the Leadership Foundation website.

Hosted by Evan Davis, the Radio 4 series ‘The Bottom Line’ explores current issues in business and economics. The new series for 2016 began with the programme, ‘Managing the Boardroom’, that examined how company boards operate.

The programme explores different aspects of the boardroom in conversation with Sir David Walker, Michael Jackson and Margaret Heffernan all of who have extensive experience of working with, and on boards.

David Walker suggested prior to the recent financial crisis too many non-executive directors had abdicated responsibility, giving insufficient attention and time to their role. As a result some executive directors received insufficient challenge.

Margaret Heffernan introduced the idea of ‘wilful blindness’: the deliberate choice not to question or challenge. In too many instances non-executive directors choose to be blind.

The question of board diversity was explored. Heffernan suggested however good the Chair of the board and the chief executive officer (CEO), they will have ‘blind spots’. One reason for a diverse board is to address these blind spots. Secondly, a lack of diversity risks ‘group think’. Michael Jackson a venture capitalist and chair of entrepreneurial technology businesses, believed for his companies there was a natural dynamism to the boards and the risk of group think was low. David Walker emphasised the importance of having people on a board with different kinds of experience, as well individuals will specific professional capability, which aligned with the organisation’s field of activity.

Other matters discussed in the programme included the:

  • size of a board, with 10/12 directors being considered optimum
  • critical importance of the relationship between Chair of the Board and the CEO, and the need for there to be mutual trust
  • risk that a board focuses on the easier ‘box-ticking’ items, and gives insufficient attention to more difficult matters such as corporate culture
  • importance of dealing with the most critical items early in the Board's agenda, when participants are at their most attentive

You can listen to the full programme by clicking here.

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