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Effective Board Management Requires the Right Mix of People and Structures

Effective board management involves a lot of things including the right mix of people and structure. But it also includes an environment of open discussion and debate, as well as the ability to engage and effectively communicate with CEO and board members as well as independent directors and employees. These skills and behaviors can make all the difference.

The right mix of people, however, will vary based on the company. The best board compositions will balance skill sets, expertise in the field, and personalities. They will include people with the courage and conviction necessary to alert others in difficult situations. They will have a high level of trust in each other and with the CEO. They will be able to quickly and effectively to comprehend the complexity of critical company issues, including operational, financial, as well as strategic challenges and opportunity.

Boards should also ensure that they understand their roles within the organization. This is particularly important for boards of not-for profit organisations, which are subject to significant legal risk if they fail fulfill their governance duties.

Finaly, boards need to be able of identifying and evaluating the effectiveness of their own boards. A rigorous assessment process will enable them to address weaknesses in talent, build an open and transparent board culture, define their strategic goals and ensure that the board is aligned as a whole with the CEO.

It is also important to review the structure of the committees and ensure that they are formulated to assist the board in reaching its objectives. It is possible to think about removing committees that are no longer necessary or changing the makeup of existing committees. For instance, a committee focused on the risks of climate change may not be necessary for a bank that does not have physical assets in the area.