Board Vision without Action is merely Day Dreaming...

Warren Buffet recently made the point that most independent directors are not really independent. They are paid substantial board fees while on the lookout for additional Board roles. According to Buffet these board members are not going to rock the boat because if they do, they are unlikely to be recommended for other boards.

Action without a compelling Company Vision is only passing time, Vision without action is merely Day Dreaming, but Vision with Action will change your World of Governance.

I’m Doug Marsh. JP, Life Fellow NZIM, (Rtd) Fellow Inst. Directors, Wellington based Professional Chairman & Director, Inaugural President Business NZ and Hon.Consul. 

MY VISION: To see NZ Boards heralded internationally, as leaders of exemplary Good Governance practices, guaranteeing successful businesses - as an absolute.

The recent debacle of failed NZ Company’s causing NZD $5b destruction of value is a case in point. Naive cavalier Directors, devoid of success vision devoid of capabilities to maximise long term asset value return, recklessly trading while balance sheet insolvent, and characterised by the Court as having poor governance and risk management processes

At the core of these investor creditor and employee tragedies is the board of directors.

What is glaringly obvious from those failed company boards is incompetence. The absence of Director capability assessments and sound practices to populate their Boards

The predetermined goal of any Co. Board is to maximize asset value rather than it serving as an underperforming oversight body.

 Therefore, the competence needed for company boards has got to be specific.

And for each specific category, the right candidate should not just have experience. He or she must also have an extensive track record of performance in the particular category.

For clarity, the intent is not for each director to have the experience and track record in all three following categories.

Instead, one or more directors should fall into the “industry” category, and one or more “Specific Strategy Formulating Capabilities” and so on.

The following, at a minimum, are the categories for director selection:

 ●    Industry Dynamics –recent experience and a track record, not historic

●    Specific Strategy Formulating Capabilities – Search & appoint directors with       experience and a track record in a field or discipline that is critical to boosting asset value strategy.

 ●    Value Creation Smarts – capital appropriation, major projects and value creation initiatives.

●    Uncompromised High-Performance Toughness Mindset. Personal Ownership Drive.

●    Independence remains a required criteria for director selection as does sound governance qualification, experience, capability and supporting references

●    The search should be wide open with no restrictions related to gender, race, ethnicity etc.

Selecting directors based on competence neither guarantees nor precludes gender or any other “balance” on boards.

What is needed is not just an improved selection process but a radically new governance model A process that delivers rocket thrust to maximising asset value.

Some boards are undervalued due to underutilized assets. Complacency and bad habits exacerbate sound governance. Meaning a predisposition for compliance and oversight rather than on maximizing performance and long-term stakeholder value.

The real problem is a flawed board characterised by tweaking its practices rather than transforming them.

The more robust model is Boards with VISION. Having the right mix of director capabilities, (validated by independent assessment) Being effectively led with strategic mindset maximising tangible and intangible assets of the company to deliver enviable company performance and stakeholder value gains.

I’m Doug Marsh and I will Stimulate & Energize your Success.

No obligation Let’s talk; email me @:-

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