High Performance Boards, 2nd Edition

CHAPTER 4The First Pillar: People Quality, Diversity, Focus, and Dedication

The quality, diversity, focus, and dedication of board members is critical. Directors need to be committed, competent, and qualified, possessing both the expertise and the willingness to contribute. A board that lacks the right composition, does not focus on the most important issues, or whose directors are insufficiently dedicated, is at risk of major failure.

A case in point is the Toshiba accounting scandal, where individual and institutional corruption at the 140-year-old Japanese electronics conglomerate went undetected by its board of directors.

Quality and Diversity

Expertise and competence are essential attributes of any high-quality board (Table 4.1). In this regard, skill maps are a useful tool for not only assessing the range of competencies of the current directors but also for specifying the skills, attributes, and even personalities required for effective board work – and for addressing any gaps between the board's current and ideal composition. The fit between the skillset of each member and the board's requirements is what counts. There is no ideal skill map, and typically it should extend beyond professional experience to include personal attributes and personality traits, as exemplified in Table 4.2 at the end of the chapter.

Diversity – of industry, professional background, gender, ethnic background, age, personality, and opinion – also improves the quality of board decisions, in ...