What are the three areas in the model of corporate governance?
- Board demographics
- Board attributes
- Board dynamics
These areas encompass various factors influencing board performance and effectiveness.
What does board demographics capture?
- Capacity (fit/proper, external commitments)
- Capability (independence, professional capital, financial/technical expertise, diversity)
- Connections (professional, alumni, social)
Board demographics reflect surface characteristics of directors.
What are the components of board structures?
- Basic set up (NED ratios, size, committees)
- Chairman set-up (CEO split, former CEO, Exec)
- Director set up (tenure, diversity, compensation)
- Board tasks (meeting frequency, review, induction/development)
These components define the organizational framework of the board.
What are the key aspects of board attributes?
- Role on board
- Personal characteristics (personality, mindset, motivation, derailers)
- Character (ethics)
Board attributes delve into the psychological and emotional competencies of directors.
What does board dynamics refer to?
- Board cohesion/challenge
- Stakeholder conversations
Board dynamics shape the culture and performance of the boardroom.
True or false: A director’s track record always predicts future performance.
FALSE
Track records can contain significant bias, leading to the use of tools like competency-based interviews and psychometric tests.
What is the key question regarding board attributes?
‘Do directors display competence, commitment and character?’
This question is crucial for assessing the effectiveness of a high-performing board.
What are the specific competencies required for directors?
- Varies depending on the role each director takes in the boardroom
Different roles may necessitate different skills and competencies.
Fill in the blank: The 11 Cs model of corporate governance includes detailed components for _______.
board dynamics
This model helps in understanding the interactions within the boardroom.
What is the 11 Cs model?
A framework for governance covering structures, demographics, attributes, and dynamics.
Name three human factors increasingly relevant to governance.
Culture, resilience, diversity.
What is board dynamics?
The psychological processes that influence how boards function individually and collectively.
What leadership style is now preferred in governance?
Humble, authentic, and collaborative leadership.
What does the company secretary’s evolving role include?
Strategic leadership, behavioral coaching, ethical influence.
What are the four quadrants of the 11 Cs model?
Board Structures, Board Demographics, Board Attributes, Board Dynamics.
Why is ethics central to governance?
Ethical behavior builds trust and reputation, and prevents systemic failures.
What does ‘tone from the top’ refer to?
The influence of boardroom culture on the wider organizational culture.
What is the difference between boardroom dynamics and board dynamics?
Boardroom dynamics refer to in-meeting behavior; board dynamics include broader systemic interactions.
Director attributes
include role-specific and leadership competences, commitment and personality attributes, and director character.
These attributes
have significantly more potential to influence board governance outcomes; however, overall, a board’s dynamics will always mediate how much individual directors can contribute to board effectiveness.
Corporate scandals
have led to commentators increasingly questioning the existing structural focus of corporate governance practice.
Emerging interest in a range of human factors
the shifts in approaches to leadership, and the refocus on ethics, is encouraging governance professionals to embrace a psychological perspective.
The evolution of governance codes and academic research
have made some moves to do this already, but there is more work to do.
The 11 Cs model
harmonises both the existing structural and emerging behavioural components of board governance.
