Characteristics for Making Boards Work- index for board effectiveness

What is it about?

While corporate globalisation has certainly allowed for access to new resources, it has also spurred new challenges. Responsible for the long-term decisions making process, the board is left with a number of challenges as to how to create the right balance at the board level? To enable this balance, this paper covers the most eminent factors impacting on board effectiveness namely diversity, leadership, culture dynamics and sustainable innovation. This paper offers a new board effectiveness scorecard. A study of how boards fare along these four scorecard dimensions is reported for 16 out of the 100 most sustainable global companies. The findings offer interesting insights into the boardroom practice, largely determined by regulatory and cultural differences. In particular, European firms seem more concerned with board diversity and leadership than do their Anglo-American counterparts. However, the key message from this paper is that board directors need to stand above their context and innovatively emerge with a sustainable solution that delivers value to their firms and society at large. Regretfully few boards are identified as being able to do just that.

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Why is it important?

The paper proposes a scorecard of board effectiveness that encapsulates and targets all problematic aspects of corporate governance namely, diversity, leadership, cultural dynamics and the possibility to innovate.

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