Clients improve the effectiveness of the board of directors through counseling, capability building, and developing new insights.
It's no mystery; an effective board of directors has a better understanding of where their company creates value, the potential risks, and their strategy.
These boards evaluate resource allocation, embrace robust feedback, and debate alternative strategies. They also assess trends and uncertainties and discuss where value will be created with the CEO. Unengaged boards, on the other hand, can destroy value by focusing exclusively on fiduciary activities or overemphasizing short-term financial results.
We help clients improve the collaboration between management and the board by, for example, facilitating strategic discussions or CEO succession plans.
Our latest research shows that effective boards find the right balance between providing strategic direction and ensuring effective oversight. But we also know that most boards still fall short. In fact, more than a quarter of the 1,119 directors we recently surveyed said that their board's decisions and activities only have moderate to low impact on the company's long-term value creation.
We lead group and one-on-one discussions with board members and chairpersons to improve the knowledge of the board and help directors build a long-term mind-set.
Build a forward-looking board
Many boards spend significantly more time on fiduciary activities than on value-enhancing discussions. Our recent research has shown that effective boards interact more often with their management teams and engage in continuous-improvement activities such as regular feedback and performance discussions.
We support our clients with their regular board-effectiveness discussions by analyzing how they spend their time, how they work together, and how they perceive board performance overall. The results are measured against a large global sample.
Provide a forum for board exchange
Many of today's boards struggle to master the critical governance challenges stemming from regulatory, industry, and macroeconomic trends.
We provide a number of platforms for chairs and board directors to have a candid dialogue with peers, benefit from one another's experience, and hear from experts, both in client-specific or multiclient formats.
Establish an effective board and governance structure
New regulatory requirements, particularly in the banking sector, drive increased subsidiarization of multinational organizations. We have developed a unique approach for creating an integrated group and subsidiary governance framework. We support our clients to define consistent principles that guide the composition of boards, balance group and subsidiary board responsibilities, and align meeting schedules.
We worked with an investment holding company interested in becoming an even more active owner by taking a fresh look at the overall governance of its portfolio companies.
Before moving into more active ownership, the fund wanted to determine a factual baseline for its current position. We worked on detailed analysis of the portfolio looking at strengths, improvement potential, and the likely effects of external factors such as the regulatory framework, globalization, and the direction and speed of technological development.
The analysis was based on an online survey with all board directors and interviews with the chairs of the portfolio companies. We facilitated a workshop to discuss the survey results and identify which initiatives would add the most value.
The role of the chair in leading the board emerged as a valuable initiative. To support this role, we established a program for chairs of all the portfolio companies to meet three times a year and discuss pressing matters, such as digital disruption. This established a process of continuous improvement through shared knowledge and experience.