Is it time for Director Effectiveness Reviews?

The picture above is a scan of some of my brainstorming doodles in the light of recent corporate traumas.

I’m starting work with current clients on director effectiveness reviews alongside their board effectiveness reviews, which are used by some merely as a “tick box” exercise.

The behaviour issues arising in board effectiveness reviews are never published or rarely addressed fully. This is not the fault of the reviewers.

I don’t carry out formal reviews myself. I focus on addressing the behaviour issues which are surfaced by them.

It seems to me that effective boards are those where there is a shared purpose, an agreed strategy to achieve that purpose and negotiated behaviour change to implement the strategy. I call this PSB.

When I say negotiated behaviour change I mean each director’s commitment to colleagues to change, even a little, their worst behaviour that is likely to increase risks and smother opportunities.

It would be easy to kick this issue into the long grass, as done in the Financial Services sector, by falling back on yet another noun: conduct, which is observed behaviour over time.

Boards have an uncanny knack of appearing to confront tricky issues by turning them into grandiose nouns. All that happens is that there’s lots of faff and paperwork and conferences and no change. Witness The Banking Standards Board’s recent scathing reports into the lack of improvements in “conduct” since the Global Financial Crash.

I prefer adjectives: an effective board rather than board effectiveness. So what about ensuring we have effective directors to enable that outcome?

The main test for an effective director, in my view, is a willingness to change, even a little, their worst behaviour.

Are you?

Ciarán Fenton

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