Throughout the years, I have held many board positions. Each of them was an experience in structure and compliance, collaboration and communication, and leadership and trust.
Based on their areas of proficiency, board members are selected for strategic purposes to guide companies through a specific time of growth. The role filled depends on personal knowledge and bringing expertise to the table that can help the organization navigate unique challenges and opportunities.
Corporate board roles average around 250 hours annually but can easily reach up to 350 hours. The amount of time dedicated to oversight and advisory participation grants board members an insightful view of the organization and its stakeholders. It’s entirely within the realm of boards’ duties to determine risks and engage in decision-making in the name of stakeholder protection and overall experience, making the story of the Boeing board especially problematic. In February, Boeing shareholders filed a lawsuit against the company’s board of directors—citing an oversight of duty and failing to hold the company accountable for safety before and after the crashes of two 727 MAX airplanes—writes Sandra J. Sucher and Shalene Gupta, in the Harvard Business Review.
According to the HBR authors, five main lessons emerged:
- Hire board members for competence and objectivity. Processes eroded over time. Board members must maintain their three prominent roles: to monitor, decide, and advise. New members should complement existing skillsets and bring their industry- and role-specific strengths to the board.
- Ensure the board structure aligns with industry needs. In the Boeing board example, safety committees and other procedural checks and balances were missing. This scenario ultimately negatively affected their stakeholder’s safety and trust.
- Prepare for the worst case. A “normalcy bias” says that in the event of a bad event, people’s first instinct is to deny reality instead of dealing with it; it’s a bias because it interferes with the ability to imagine the scale and impact of a situation. Boards must mitigate this bias.
- Manage for truth and realism. The board is a team—honest discussions produce good decisions.
- Practice accountability, and punish wrongdoing. Serve as the organization’s “ethical backbone” and course correct when things go wrong.
The board is an elite group, recruited and placed to serve in the company’s interest, its employees, and its customers. Addressing risks and concerns with data, competence, knowledge, and truth is a cornerstone of the board’s long-term success
All opinions & expressions are solely those of the author and not those of any other individual, institution or business.