Your board can either be a competitive advantage or a destroyer of value.
As a director of companies ranging from America, China, India, Brazil, and Canada, I can demonstrate that nothing overcomes having a wrong CEO or a wrong leader of a board.
Boards don’t run the company, they either monitor effectively, give great and insightful practical advice, or they make very few decisions that make the difference in the destiny of the company.
One of them, the most important, is having the right CEO at all times.
Many boards lose that focus. They spend time on certain activities rather than on those decisions only the board should make, such as the incentive to the CEO.
There is a voice today that the short-term annual incentive is a major call for short-term thinking. It is overdone and it must be changed to a more long-term performance-based incentive and less on the annual basis.
Another decision is the relevance of business models. Boards should independently verify how good it is and how to improve it because boards themselves don’t have the capability and time to dig into this.
The last item that boards need to focus on is the risk appetite because the risks are now converging and in some cases, they offer existential issues.