Building the High-Performing Private Company Board
Three characteristics of the best private company boards.
A theme running through this issue of Private Company Director magazine, and the theme of our upcoming Private Company Governance Summit 2016, is what is involved in building a high-performing private company board.
How can private company owners, shareholders, and directors transform their boards from check-the-box legal obligations into an asset and resource that propels the success, growth, and continuity of the company? What really makes a private company board “high-performing”?
In my view, a high-performing board has these three broad characteristics:
A single focus. The board always has the best interests of the company and its future at the forefront. While having a majority of truly independent board members (read: non-family, non-aligned) is a best practice, any board with any board members can demonstrate that their personal goals are not in conflict with the overall goals and interests of the company, and that the company always comes first, second … and third.
Collegiality, but not groupthink. A high-performing board needs to be able to work together as a team, especially when facing thorny issues. But there should be a concerted effort to avoid agreement simply to maintain harmony in the boardroom. Healthy disagreement should be encouraged. Board service, at its most basic, is about how the board works through its members’ differing viewpoints to arrive at a consensus.
The ability to look at itself critically, and focus on continuous self-improvement. A high-performing board never rests on its laurels. Its members perceive board service as a commitment and an honor, and they demonstrate that through regular self-evaluation, and the ability to learn lessons and improve with experience. The board changes and refreshes itself when needed in order to continue to perform at the highest level.
How a private company board acquires and maintains these characteristics is the trick, and I hope the contents of this issue, the information on our website, and the presentations at our conferences contribute to your board’s quest for high performance.