Pictured above: Dave Darlaston
Company boards need to plot a route map for success if they are
to be at the height of their powers, according to Dave Darlaston,
partner at the Midlands office of national audit, tax and advisory
firm Crowe Clark Whitehill.
Directors, he cautioned, were coming under all sorts of official
pressure to get their act together.
"Challenge is just as important as teamwork and, as such, an
effective board will not always be a comfortable place."
His comments follow the latest official guidance from the
Financial Reporting Council - intended to make boards think about
how they can best carry out their role, demonstrate leadership and
make strong decisions.
Mr Darlaston said: "Ensuring appropriate structures and
processes are in place is not sufficient on its own - boards and
individual directors need to focus on the way in which they carry
out their role and their own behaviour, creating a 'route map' for
success.
"Board effectiveness is not another governance 'box-ticking'
exercise and each organisation will have its own strengths and
weaknesses at board-level. Consequently, it is important to
consider how the board, as a team, works together and takes
responsibility for ensuring the organisation meets or exceeds its
strategic objectives."
Key factors were having a chairman who could get the most out of
the team; a 'balanced board' in terms of skills, experience, age,
gender, race and independent non-executives; focussing the
board's agenda on strategy, performance, value creation and
individual accountability; good communication; and thorough
evaluation of itself both as a unit and individually.
Mr Darlaston said: "The decision-making process is critical.
Boards need to create an environment that allows for debate and
challenges with clarity on actions, timescales and responsibilities
that are followed through.
"They must define the nature and extent of the significant risks
the organisation is willing to take in the context of strategic
objectives, business unit structures and critical processes.
"Make a difference … change behaviours."
He added: "Boards are coming under increasing scrutiny over
their role in improving company performance while, at the same
time, managing and controlling risk. Central to this are the
governance arrangements in place to improve board effectiveness and
ensure the values and culture of an organisation, which are
established by the board, permeate all levels of the
organisation.
"An effective board understands its role and the behaviours it
needs to display will make a difference."
For more information about Crowe Clark Whitehill, please visit
their website here: www.croweclarkwhitehill.co.uk