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Hardman & Co Monthly: September 2019

Feature article: 'Board Effectiveness - The next lever of value creation'

Boards of Directors of public companies used to consist of the great and good, friends of the Chairman and placemen. Such an approach has become unacceptable to investors and, increasingly, society. Today, the role of the director brings serious legal responsibilities. Equally importantly, however, a well-constructed board can be part of the drive for value creation. This should form part of investors’ assessments of companies.

In this article, Dr Sabine Dembkowski of consultancy Better Boards sets out the seven key characteristics of an effective board, which she calls ‘Hallmarks’:

â–º Hallmark 1: Composition of the board

â–º Hallmark 2: Ability to use the strengths of all members

â–º Hallmark 3: Clarity of roles and responsibilities
â–º Hallmark 4: Joint vision
â–º Hallmark 5: Ability to resolve conflicts between board and management
â–º Hallmark 6: Structure and organisation of the work of the board
â–º Hallmark 7: Regular reviews and reflection about the work

Finally, she outlines a ‘five-step action plan for better boards’.