Board members can be disengaged, despite their best intentions. This is usually the result of poor group dynamics–rivalries and dominance of a few directors, and poor communication. These hinder the board from participating in the collective decision-making process crucial for effective decision-making.
It may also fail http://www.boardroompro.net/managing-conflict-of-interest-at-board-level-4-things-to-know/ in creating internal structures that are suitable to the board’s assessment of performance responsibilities. This usually means establishing officers or committees which are responsible for gathering, analysing and presenting evaluation results to the board for consideration. The decision-making process of transferring these tasks to the entire board, or even confining them to the management team and CEO is unlikely to result in effective oversight.
The board is likely to miss the overall performance of their business if it fails to include behavioural factors in evaluating individual directors’ contributions. This is usually an ineffective process conducted only to satisfy the requirements of listing or to provide lip service to best-practice governance.
There are a variety of ways boards can improve their performance and meet their fiduciary responsibilities. Concentrating on the high-quality human interactions in the boardroom is a good first step. This can be accomplished by making sure that the board is flexible and resilient in nature. It is also crucial to have the right mix of experience and skills, including gender diversity. This lets the board have a wider array of perspectives, and more effectively solve the pressing issues. It also helps the board create a collaborative culture that fosters open communication and diversity of views.