High Performance Boards, 2nd Edition

CHAPTER 1The Four Pillars of Board Effectiveness

Over the past decade, we have witnessed dramatic and unprecedented developments in business, politics, and society. The main upshot of this has been the growing realisation that governance is the determining factor behind the success and failure of organisations. And with fresh evidence of abdication of duty in the corporate and policy-making spheres emerging on a weekly basis, there are growing demands for better governance in different countries, and for all types of organisations – businesses, governments, NGOs, and many others.

When we refer to governance, we mean the quality of decision-making and implementation at the top of organisations – and the processes to ensure these. Increasingly, boards are seen as having a key responsibility and role as the ‘owner’ of governance in an organisation. It is their competence, structures, and integrity, and their interactions with CEOs and management teams, that shape the governance DNA of organisations.

Until a few years ago, governance and boards were considered to be well understood, and operating along standard and predictable lines. As a result, the subject attracted relatively little attention from researchers. But the situation changed significantly as more stories of corporate malfeasance appeared in mainstream media, industry publications, and academic journals, inevitably accompanied by the question ‘Where was the board?’

Indeed, events during the past decade have made it ...