Chairmen Speak About Board Performance

On Sep­tem­ber 16, 2010, Lon­er­gan Part­ners and the Sil­i­con Val­ley Chap­ter of the Nation­al Asso­ci­a­tion of Cor­po­rate Direc­tors host­ed a pan­el dis­cus­sion enti­tled ​“Chair­men Speak about Board Per­for­mance.” The event was mod­er­at­ed by Mark Lon­er­gan, Vice Pres­i­dent of SVNACD.

• Board per­for­mance must be man­aged and improved at two lev­els—that of the indi­vid­ual board direc­tor and that of the board as a whole. Now more than ever man­ag­ing the com­po­si­tion and respon­si­bil­i­ties of board direc­tors is crit­i­cal to success.
• The effec­tive board chair­man must act as a con­sen­sus builder, in order to shape one uni­fied vision of the board’s input to the CEO. It is not in the best inter­est of the com­pa­ny for board mem­bers to offer con­tra­dic­to­ry opin­ions to the CEO.
• The effec­tive board gets to know senior man­age­ment beyond the CEO lev­el, engag­ing with them on real issues they face. Their objec­tive should be to offer man­age­ment advice tai­lored to the cur­rent sit­u­a­tion, not just ​“war sto­ries” of how they han­dled chal­lenges in the past.
• Board cul­ture is chang­ing to be more per­for­mance dri­ven. While the cul­ture of pub­lic boards was cit­ed in Lon­er­gan Part­ners research as an imped­i­ment to improv­ing the per­for­mance of boards, the chair­men on the pan­el observed that the cul­ture of pub­lic com­pa­ny boards has evolved post Sar­banes-Oxley to more close­ly resem­ble pri­vate boards of key investors — per­ceived to have a deep per­son­al com­mit­ment to the suc­cess of the company.
• The focus on pub­lic com­pa­ny board per­for­mance is increas­ing and boards will con­tin­ue to be in the spot­light for some time to come, mak­ing the job of the board direc­tor more challenging.