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Board Culture Survey Highlights High-Performing Boards and Directors

An article based on a recent survey from Russell Reynolds Associates focuses on high-performing corporate boards and directors and explores behaviors that launch them in this category. According to the article, Gold Medal Boards are boards that rate themselves as operating in a highly effective manner and that oversee a high-performing company (one that has outperformed relevant total shareholder return benchmarks for two or more years consecutively). The survey suggests that boards which adopt a broad and forward-looking perspective, foster a cooperative and inclusive culture that is also honest and self-reflective, and which exercise diligence with run-of-the-mill as well as strategic tasks, may qualify as a high-performing board. The survey points to the following key characteristics of these boards: 

·       They prioritize more strategic, longer-term and forward-looking discussions.

·       They spend more time on forward-looking, value-creating activities and less time on compliance activities than their fellow directors on other boards.

·       They were more likely to identify strategic planning, oversight of M&A transactions and CEO succession planning among the top three areas where they spent the most amount of their time in the prior 12 months.

·       Board chairs demonstrated behaviors that foster and facilitate higher-quality debates in the boardroom.

For high-performing directors, the following key indicators of effectiveness were noted:

·       They were more likely to report engaging in enterprise risk review, board refreshment activities and crisis management scenario planning.

·       They were less likely to spend time on lengthy financial statement reviews, audit-related activities and compliance-related activities—although all those activities get done too.

·       They were more likely to seek to understand other perspectives, focus on being present at meetings and build deep relationships with management and investors.

According to the article, 98 percent of these high-performing directors rated their boards as being a 9 or 10 on board culture on a 1–10 scale, over twice the frequency at which the global peer set rated their board culture.

 

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