Board members tend to be very accomplished and connected individuals, which is why they are board members. That may not be enough in today’s world for these reasons:
- Board members are part-time but the responsibilities are full-time.
- Independent board members are challenged to be truly independent, because they are dependent on management for so much crucial data.
- In today’s global markets, many board members do not have sufficient background on the locations and challenges the company faces.
- Many boards are not diverse – the old boy’s network may not be enough.
- The legal complexities for public companies are increasing each year.
- Liabilities for boards are out of scale compared to the average board member’s compensation.
- Many companies have operations in markets that do not play by the North American rules. Board members are often at risk due to international operations without even knowing it.
- Many board members have never visited the operations over which they have oversight responsibilities.
- Many boards are not integrated into the company’s strategy and risk management, to the extent that various disclosures and underlying frameworks require.
- Many boards struggle to balance shareholder value and performing it in a responsible manner, all while trying to achieve adequate corporate governance.