Do we need boards?

There are times when it feels right to throw the baby out with the bathwater! A sequence of corporate bad behaviour leaves one thinking what is the point of a board if this is what they do? However, each crisis also highlights the good that very many well functioning boards do.

Boards, in very many contexts serve as well structured guides and oversight controls to steer, oversee, monitor or facilitate good decision-making processes and operations. The primary purpose of boards is to bring together diverse expertise and perspectives to ensure informed and balanced decisions.

Boards create the checks and balances that ensure ongoing value in an organisation and prevent the stripping of assets for the short-term personal gain of a few. That is if they are doing their jobs properly.

Boards that are actively undertaking the role they are their to serve do the following:

1. Governance: they play a vital role in overseeing strategic direction, ensuring financial health, and protecting stakeholders' interests. They help maintain accountability and transparency, taking advantage of opportunities whilst managing associated downside risks, and ensuring legal and ethical compliance.

   
   

2. Strategic Decision-Making: boards provide clarity of direction and business models that help guide the organization. They make high-level decisions, that balance the short-term returns whilst ensuring long-term sustainability. They assess risks, opportunities, and align business goals with societal needs.

   
   

3. Expertise and Diversity: a well-formed board is comprised of individuals with diverse backgrounds, providing valuable insight into various domains, such as finance, marketing, law, and technology. This diversity helps the organization make sound decisions and respond to a fast changing world with many diverse modern challenges more effectively.

   
   

4. Accountability: boards hold themselves and management leadership accountable by evaluating performance, implementing checks and balances, and ensuring that decisions are aligned with the values and goals of the organization. They manage conflicts of interest so that collective outcomes outweigh any individual interests.

   
   

5. Stakeholder Representation: boards ensure stakeholder interests are represented in their decision-making processes, capturing their concerns and interests and ensuring the best decision-making outcomes.

   
   

Overall, boards enhance an organization’s effectiveness, adaptability, and integrity.