Corporate directors have their hands full. They must help their companies prosper, keep their shareholders happy, establish sensible CEO performance standards, and evaluate strategy and risk in a volatile business climate. How can board members keep all those balls in the air? These dilemmas have no easy answers, but Ram Charan, best-selling business author and leading expert on corporate governance, provides excellent suggestions for this formidable balancing act. Though his text sometimes digresses – interestingly – from its mission, Charan provides board members with many useful, if not entirely new, insights. If you are a corporate director or even if you sit on a nonprofit’s board, getAbstract believes you can gain a lot from reading this superb, savvy book.
Hard Times for Directors
Directors face an unsettling new situation. With many businesses struggling, and corporate watchdog groups demonstrating increasing bark and bite, CEOs aren’t the only ones taking the heat. Now, public attention turns also to boards and individual directors. In response, they must demonstrate maximum accountability and leadership, “not just over-the-shoulder monitoring and passive approval.” How can boards do this best? To find the answer, directors should ask the following 14 tough questions about their primary challenges:
1. Does Your Board Have the Right Members?
Depending on your industry, and your firm’s competitive and operational situation, your board probably needs some specialists. Are you entering a market in China? If so, you need a board member with China expertise. Is logistics a major challenge? Then add a supply-chain expert. The governance committee must ensure the right mix of members. To diagnose the board’s strengths and weaknesses, have each director fill out a “skills matrix.” Anticipate the expertise the board will need in the future – for example, comprehensive knowledge of capital markets or innovation processes...
Ram Charan, Ph.D., advises CEOs and boards. He is a popular author who has published 15 other business books, including Execution, a bestseller he co-authored. He is a member of three corporate boards. Directorship magazine named Charan one of its top 100 directors.