The real role of corporate directors: balancing prudence with progress

Bob Garratt (Chairman of Board Performance Ltd in London and Singapore. He is a Visiting Professor at Cass Business School, City University, London where he spans the Centre for Corporate Governance and the Centre for Leadership, Learning, and Change. He has previously held a similar post at The Tanaka Business School, Imperial College, London University, and Cambridge. He is author of many books, including The Learning Board, The Fish Rots from the Head, The Crisis in Our Boardrooms, and Thin on Top: Why Corporate Governance Matters, amongst others. E‐mail: garratts@btconnect.com)

Journal of Business Strategy

ISSN: 0275-6668

Publication date: 1 December 2005

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

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Publisher

:

Emerald Group Publishing Limited

Copyright © 2005, Emerald Group Publishing Limited

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