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Recommended Readings: Business Strategy

 

Building Better Boards  by David A. Nadler | Harvard Business Review, May2004, pp. 102-111

Boards must be able to add value without meddling and make CEOs more effective but not all-powerful. A board can do that if it functions as a high-performance team, one that is competent, coordinated, collegial, and focused on an unambiguous goal. There are limits to how much good governance can be imposed from the outside.

The board must conduct regular self-assessments. As a first step, the directors and the CEO should agree on which of the board models best fits the company: passive, certifying, engaged, intervening, or operating. The directors and the CEO should then analyze which business tasks are most important and allot sufficient time and resources to them. Next, the board should assess each director's strengths to ensure that the group as a whole possesses the skills necessary to do its work. Directors must exert more influence over meeting agendas and ensure they have the right information at the right time and in the right format to perform their duties. Finally, the board needs to foster an engaged culture characterized by candor and a willingness to challenge.