Boardrooms that Work: A guide to board dynamics
by Margot Cairnes
ISBN: 1-876604-25-5, Publisher: Australian Institute of Company Directors and Group of 100, 2003
Reviewed by: Julie Garland McLellan*
This is a succinct little book that distils meaning from a variety of observations and references to create a clear and simple message that is delivered in under an hour.
The book is unique in covering the interface between human behaviours and governance structures and processes. It makes the crucially important points that it is people that operate systems, and people that can cause even good systems to fail. The concept is that after good processes are put in place, the social dynamics of the board can cause unintended behaviours that could, if left unchecked, undermine the value of the processes. Signs of malfunctioning processes are clearly identified. The good examples provided in the text will help even the most novice director to understand the behaviours, the underlying issues and the potential for disaster.
The book then suggests mechanisms for vigilance and remedies for processes that are starting to deviate from the intention. The chapter on creating an effective board culture is pure gold. Each of the strategems put forward will work. I have tried all of them and can vouch for the results. The simple mechanism of defining the desired working culture for the board, and then designing the processes that will support that culture is so obvious but most of the boards I advise have addressed the issues in the reverse order.
There is sure to be a regulatory response to the corporate behaviours that have led to the current economic situation. As this book demonstrates, rules are necessary but not sufficient to ensure good governance outcomes. It is a shame that, in the five years since it was published, the simple ideas it contains have not been widely adopted. They are ideas that could avert disasters.
Board relationships are too valuable to be left to chance. They certainly can’t reliably be expected to simply emerge once the structures and documentation have been established. By encouraging boards to think about how they wish to function before they start to write the rule books, this book sets a useful precedent. It should be obligatory reading for all board consultants, governance advisors and company secretaries as well as for all board members.
* Julie Garland McLellan is a governance and board consultant. She is a professional non-executive director and an AICD NSW Councillor. She is the author of “All Above Board: Great Governance for the Government Sector” and is currently working on her second book “All Above Board: Great Governance of Strategy and Risk”.
Julie Garland McLellan to judge 2011 Global eBook Awards