The work of a board requires strong cognitive abilities in order to perform their directorial duties. Just like a steering wheel can’t accelerate the speed of the vehicle, but by navigating the better pathway, it may shorten the distance or save the energy to reach the destination smoothly.
Verify purposes of the business: The purpose itself is a multidimensional system. The often overlooked business element is "PURPOSE" when defining a goal or objective. Asking the management the question "WHY" you are pursuing something before and during their pursuit will always test whether the goal or objective being worked towards is a valid one. Every business as a system has a purpose. A system is only a system in relation to a purpose and that purpose is not inherent in the objects and processes you build and create.
As the management guru Drucker well put: The purpose of the business is to create customers. For the purpose of management, however, differences in meaning are entirely purposeful and should not be allowed to just colloquially wander and morph. To align purpose and direction, perhaps the first place to start is the organizational leaders including BoDs lead by example, act in line with the company purpose, agreeing on the purpose and direction; then educate and engage the people.
Set business policies: Corporate boards are responsible for making policies. Generally speaking, policy is a set of principles for decision making or guidelines to drive behaviors. A policy is implemented via protocol, process or practice, etc. When having positive policies, what do they look like, and how do they affect organizational performance and maturity? Good policies set the tone for encouraging creativity, motivating learning, enforcing risk-management, and building the working environment in which everyone is at the same playing field to follow the same set of rules despite differences in roles/job titles.
High impact boards play a crucial role in making good policies for encouraging great things to happen easily, letting capabilities shine, instilling positive energy, and setting the progressive tone to push changes and promote innovation. The modern board can set good policies and make well-defined principles among future scenarios that advocate advancement and promote positive behaviors.
Monitor performance: There is no doubt that the board only fulfills its role to shareholders and the management team when it is focused on performance. The Board's role, in large part, is to make good decisions that enhance the value creation for the organization. For a corporate board to monitor performance, it is critical to look at all sorts of business success factors such as leadership, culture, processes, and make improvements if necessary, then determine whether new approaches/methods/tools would be a good addition to the mix, to ensure high performance of management practices.
To some degree, conformance is inherent within the value-driven performance. More specifically, "performance" should be focused on the maximization of 1) the multitude of business capital allocation, (2) company performance and (3) the multifaceted shareholder value. The ability of boards to oversee and advise management so as to ensure the best fit between (short term) profitability (shareholders) and long-term sustainability (stakeholders: employees, government, society).
The work of a board requires strong cognitive abilities in order to perform their directorial duties. Just like a steering wheel can’t accelerate the speed of the vehicle, but by navigating the better pathway, it may shorten the distance or save the energy to reach the destination smoothly.
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