A revolution in director and board development is required and could significantly improve corporate performance according to a new book ‘Developing Directors’ published by Policy Publications. The guidebook for building an effective boardroom team’ reveals that few directors are properly prepared for their directorial roles.
Prof. Colin Coulson-Thomas, the author of ‘Developing Directors’ feels: “The lack of proper preparation for boardroom roles is such that we should assume directors are competent or expect boards to be effective. The current situation represents both a development challenge and a huge opportunity to improve governance standards and corporate performance. The best way of ensuring the longer term success of an enterprise is to ensure it is led by competent directors and an effective board.”
Coulson-Thomas believes: “Direction should be seen as a separate but complementary activity to management, rather than as a route to elevated status and higher earnings. Directors need to look beyond functional considerations and work for the best interests of the company and its stakeholders. Their perspective should be strategic rather than departmental. Directors must reconcile the concerns of various stakeholder groups, and respect views of colleagues who may have a different perspective.”
According to Coulson-Thomas: “Direction is about providing leadership, formulating strategy, establishing policies and values, monitoring performance and being accountable at the level of the company as a whole. It involves activities such as visioning, delegating to management and ensuring appropriate capabilities and controls are in place.”
Direction is not easy. Coulson-Thomas explains: “Boards have to strike a balance between short term pressures and longer term considerations, and between stakeholder interests and a company’s own requirements. Entrepreneurial drive has to be balanced with prudence and steps to monitor progress and manage risks. A director must be sufficiently alert to specifics to be accountable, while not so engrossed in detail as to loose an overview perspective.”
In his consulting work with directors and boards the Coulson-Thomas finds: “Good managers do not always become effective directors, while individuals with limited management experience can sometimes make a significant contribution to a board as a result of their personal qualities. Many specialist professionals lack a balanced and holistic perspective, and have a ‘departmental’ view of corporate reality.”
Direction can also involve risks. Coulson-Thomas warns: “The role of the board and the duties and responsibilities of a company director are at the heart of the distinction between direction and management. The duties are so onerous that opportunities should be examined with care. Many experienced directors have turned down one or more board positions because of the risks involved.”
Strategic awareness and personal qualities usually dominate the criteria for boardroom appointments. Coulson-Thomas explains: “Formulating a distinctive and compelling vision and a realistic strategy requires business acumen and the abilities to look ahead, see a company as a whole and understand the context within which it operates.”
Coulson-Thomas’ own surveys of directors have revealed: “Personal qualities sought include integrity, determination, independence, objectivity, balance, commitment, individuality, sensitivity, strategic and ethical awareness, and a sense of accountability and responsibility. Loyalty, team spirit and ‘fitting in’ are valued more highly by some chairmen than originality and creativity.”
In addition to internal monitoring and reporting past performance a board should be externally focused and looking ahead. Coulson-Thomas emphasizes that: “Directors need energy and drive to move an organisation forward, certain legal and financial knowledge, and an awareness of boardroom issues and practice and relevant governance requirements.”
Interpersonal skills are critical. Coulson-Thomas also finds that: “Skills such as planning, delegating and appraising are especially relevant. Communication skills are important both within the boardroom and when building mutually beneficial relationships with stakeholders. Thus the best candidate for financial director may be the person who is best able to explain financial forecasts and results.”
Over 4,000 organisations from smaller firms to major corporations and Government bodies have participated in a research programme led by Prof. Coulson-Thomas which has identified critical success factors and successful approaches to the challenges faced by directors and boards. ‘Developing Directors’ explains how reservoirs of latent potential can be tapped by director and board development.
‘Developing Directors’ addresses a desire for better board and corporate performance as well as contemporary concerns over corporate governance standards. The new book identifies the knowledge, skills and personal qualities required by directors and defines the competent director and the effective board. It looks at the route to the boardroom and how to become a director, how directors are and should be prepared, and provides details of twenty four director and board development courses.
Developing the boardroom team, evaluating board performance and practical next steps are also considered. ‘Developing Directors’ is packed with exercises and checklists which have been specifically designed for boardroom participation. For those concerned with understanding and addressing the fundamentals the book also examines the development challenge, the roles of directors and boards, the distinction between direction and management and factors affecting team work in the boardroom.
Developing Directors is essential reading for chairmen and directors, consultants and trainers charged with the task of developing dynamic boardroom teams to lead the organizations of today. It draws upon the author’s extensive experience of working with directors and boards, is packed with exercises and checklists which have been specifically designed for boardroom participation, and provides practical advice on identifying and developing the qualities, competencies, and approaches needed for greater directorial contribution, board effectiveness and corporate success.
’Developing Directors, a guidebook for building an effective boardroom team’, by Colin Coulson-Thomas (ISBN 978-1-872980-32-4) is published by Policy Publications, costs £34.95 plus p&p and can be ordered from Policy Publications or all good bookshops.
Twenty five new courses for directors and boards on particular activities that are vital for corporate success are also available.
Professor Coulson-Thomas, an experienced chairman of award winning companies has helped over 100 boards to improve board and/or corporate performance and spoken at over 200 national and international events in 35 countries. He is a member of the Professional Accreditation Committee and Board of Examiners of the Institute of Directors and the ACCA Governance and Risk Management Committee and can be contacted by phone or email.