Building the Board of the Future – Part 3

Boardroom%202Accountability is needed: It is a very tough task to ask someone to hold their peers accountable. Our natural tendency is to avoid holding someone accountable because of the potential tension it may create. However, accountability within the boardroom is critical to a successful board. Directors must be willing to hold each other accountable for being effective in their roles. Having an effective formal evaluation process in place for directors is one way to assure that accountability is embedded in the director’s responsibilities. The key word here is effective. The evaluation process must be structured so that directors can provide candid and detailed feedback on the effectiveness of other members of the board. Secondly, the evaluation process must have teeth and boards must be willing to act on the results in cases where a board member is viewed by peers as not pulling their weight. While some discretion is needed, directors need to be willing to have open dialogue about the importance of accountability and the commitment to effectively transitioning ineffective board members off of the board. While this formal process should take place at least annually, the informal aspect of accountability is cultural and ongoing. Establishing a culture of accountability in the boardroom will foster the type of environment where directors will be fully engaged and committed to providing the type of leadership and oversight needed to support the correct strategic direction for the bank. There is not room around the table for dead weight. A board is not a social club. Directors who are unwilling or unable to sufficiently engage themselves in the affairs of the company through their commitment of time and attention to performing their expected duties as a board member – those that are looking at the directorship as simply a “resume builder” or “ego booster” should not be in the room.