Research - effective governance means accepting challenge
New research indicates that organisational stewardship of boards has dropped to staggeringly low levels, meaning that only 18% of corporations worldwide have a strong sense of mission.
In addition, 66% of board members and senior executives say they dare not raise or address critical issues that are too complex or controversial, despite knowing that such inaction could endanger their organisation’s survival.
Reviewing the operations of over 19,000 organisations in 34 countries, UK-based leadership and governance expert, Professor Andrew Kakabadse, says that ‘tick-box protocols’ have reached an all-time high and board stewardship must be addressed urgently.
He explains: “Chairmen need to become accustomed to challenge and receiving feedback. Corporate failures and changing leadership models mean that effective board governance is presenting a massive challenge.
“Too many people are being appointed to boards on the basis of ‘competency-based frameworks’ (defining role responsibilities and organisational behaviours), when they should be gaining positions based purely on their capabilities.
“Leadership candidates need to be asked ‘how capable are you of making a difference?’ and ‘what do we need on this board right now?’
“A lack of tough introspection is leading to corporate collapse and scandals. As a result boards are becoming paralysed and unwilling to speak out, even though they know something isn’t right within the organisation.
“Mission-led organisations – where the values are stronger than the vision of a ‘hero CEO’ – tend to have a stronger sense of stewardship in their governance.
“It is not bad strategy or governance that is responsible for some of today’s organisational failures. It is a failure of stewardship. Board members and executives allow bad situations to spiral out of control because of the discomfort they face in raising an uncomfortable issue.”