The real role of corporate directors: balancing prudence with progress
Abstract
Purpose
This essay argues that many directors are never inducted and developed into their board directoral roles. By not understanding their legal roles and tasks as a director, as distinct from a manager, they can rarely extract themselves for long enough to become skilled at thinking strategically, assessing risks, and taking wise decisions for the future health of their company
Design/methodology/approach
The paper draws on many years experience of working with boards. It advocates the use of the Learning Board model, the Thinking Intentions Profile psychometric, reading newspapers and journals systematically and getting out more, as ways of creating the conditions in which strategic thinking can be developed effectively.
Findings
Three key conditions must be met before it is possible to achieve an effective board. First, agreement around the boardroom table that they will accept as essential board selection, induction, training and development, annual appraisal of the board and each director. Second, that the board chairman is fully committed to these, including his or her own 360 degree annual appraisal and is backed strongly by a truly independent company secretary or legal counsel. Third, that all directors have the same annual contract for services which spells out the time they need to devote to their crucial direction‐giving role.
Originality/value
This paper is of particular value to Boards in the UK, Europe and the USA and to senior executives.
Keywords
Citation
Garratt, B. (2005), "The real role of corporate directors: balancing prudence with progress", Journal of Business Strategy, Vol. 26 No. 6, pp. 30-36. https://doi.org/10.1108/02756660510633000
Publisher
:Emerald Group Publishing Limited
Copyright © 2005, Emerald Group Publishing Limited