Effective corporate governance is a hallmark of any high-performing board and executive team. We believe that governance and leadership are the most important ingredients for high-performing organizations, and of course governance is half the battle, although often overlooked.
Below are the ten most common corporate governance mistakes we typically see:
Failure to clarify roles and responsibilities between the CEO/C-suite and the board.
Failure to get the right people around the boardroom table, fully engaged, and doing the right things.
Failure to develop consensus in detail about where you are, where you are going, and how you will get there.
Failure to tend carefully to the interests of multiple, diverse stakeholders.
Failure to be deliberate about exactly what information the board needs to do its job.
Failure to be clear on the board’s responsibility for culture and its role with the CEO in managing and changing it.
Failure to get CEO and C-suite compensation right.
Failure to understand CEO (and C-suite) need for a coach and the board’s very different role as a boss.
Failure to appreciate the inevitability of CEO, C-suite, and boardroom turnover, and inadequate efforts to keep it positive.
Failure to actively cultivate wisdom in the boardroom: thinking vs. doing, reflecting vs. reacting, compassion vs. insensitivity and uncaring.
Each of these mistakes has its origins in a failure to be deliberate in pursuing consensus, working together in harmony, and approaching corporate governance through concinnity.
Step one to resolving these issues is certainly awareness, but an important second step is accepting that good governance is a journey, whether you have deep experience or are new to it. Those who do it well seek sustained excellence and appreciate the journey, and by no means adopt an attitude of “been there, done that.” And of course, achieving good governance is a journey you take with other board and executive team members who may or may not share your depth of experience or views.