Initiating Change in the Boardroom - Easier Than You Think

The vision of a board that is fresh, alive, and full of constructive debate, and in which directors are not only individually strong but also able to pool their perspectives to help the CEO and the company compete is becoming a reality.

Sound too good to be true? Many critics of corporate boards sense the overwhelming power of the ingrained culture of the boardroom. They share a kind of despair that change will come slowly and at great risk. There is good news for them: Change is easier to accomplish than many people think. The real risk lies in preserving the status quo.

Boards that have not yet begun to improve their practices will soon find themselves targeted for "solutions" imposed from the outside. It is time for boards to take control of their destiny and to begin the change process. The best way to initiate this change process is to begin with an honest and candid self-assessment.

1. The unwritten rules of corporate governance are changing. Standing still makes boards obsolete quickly.


2. The change process takes root quickly when a director puts a substantive issue on the table and people begin to talk. The right operating mechanisms can encourage open dialogue.


3. Changes in leadership or ownership are golden opportunities to do things differently. However, directors and CEOs should not wait.

Most boards do not overcome the real barriers to improvement. The only thing many boards do less well than review CEO performance is review their own performance in a meaningful way.

Often in the name of politeness, accurate descriptions of reality do not get put on the table. Issues that are not adequately addressed may include board behavior or the relationship between the CEO and the board. A board self-assessment that is well designed brings the issues that people instinctively dodge into an open forum; it can help make deliberations intellectually honest.

An honest board periodically asks itself whether it can take the company to the next level. As the discussion takes place, behavior patterns begin to change, and new board dynamics begin to emerge. The process can be transforming.

Ultimately, efforts to help a board function at its peak should get down to the level of each individual's performance. However, boards should proceed cautiously when venturing into the murky waters of director peer review. Although evaluation of individuals can help a well-functioning board become world class, it tends to exacerbate existing tensions.

Working with a trained and neutral third party is critical to a successful and constructive self-evaluation and peer review process.

1. Board self-evaluation can identify areas to improve; more importantly, it gets directors talking about real issues in an open forum.


2. Board self-evaluation should not be forced or mechanical. Trust is everything.


3. Director peer review can help good boards become world class. But it is not a shortcut to good board dynamics.

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