Despite their best intentions, board members may occasionally become disengaged from their critical oversight duties. This is often due to dysfunctional group dynamics, like rivalries, the dominance by a handful of directors, and poor communication which prevents the board of directors from web engaging in the collective debate that is essential to effective decision-making.
It could also be unsuccessful in establishing internal structures that contribute to the board’s assessment of performance responsibilities. It is typical to establish officer roles or committees which are charged with gathering and analysing evaluation results, before making them available to the board for review. It is unlikely that the board will be able effectively oversee these aspects if they’re left to the CEO and the management team.
The board could be unable to assess the overall performance of its company if it does not consider behavioural aspects when the evaluation of individual directors’ contributions. This leads to a sloppy process designed in order to satisfy listing requirements or to give lip service to good governance.
There are a variety of ways boards can improve their performance and fulfill their fiduciary responsibilities. The starting point is to focus on the quality of interactions between people in the boardroom. This can be achieved if the board is flexible and resilient, as well, and strategically. It is also important to have the right mix of knowledge and skills, including gender diversity. This allows the board to have a greater variety of perspectives to be gained and can more effectively address crucial issues. It can also help the board establish an environment that promotes open communication and a variety of perspectives.