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The savvy businesspeople who make up boards of directors know how to effectively run complex business operations in their “day jobs.” They hire people with proven, specialized skills and a track record of achievement. They structure and organize their efforts so talent with specific skills manage and perform specific functions, all for a smooth-running corporate machine.
Yet boards of directors, who today play a far more tactical role in the organization, still tend to focus on the historic model of a board full of generalists, doing the best they can. Since you’ve found this run more smoothly in business by specializing functions and talents, why not make this the model for board operations? The most common board committees - audit, compensation, nominating/governance - can be incredible tools for boosting the efficiency and quality of board work. We give you a round up of best practices for making your board committees into a powerful governance machine.
Boards of directors worldwide must take on increasingly tactical roles in monitoring, assurance and compliance for companies, with tougher legal penalties for oversight. Yet the board model was never designed for such a hand’s on role. It’s made up of part-time amateurs, trying to cope with oversight of full-time managers and complex organizations. This leaves boards too often missing out on risks, overwhelmed by busywork and data, and two steps behind in trying to keep up with their agendas and legal duties. That’s where the magic of smart use of board committees can make all the difference.