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CGF Articles & Editorials

HIGH PERFORMING BOARDS (2017-01-18)

By Jené Palmer and reviewed by Terrance M. Booysen

Board performance, or the lack thereof, has recently been quite prominent in the South African landscape.  Unfortunately, the examples of mismanagement, poor oversight and lacklustre governance of our state-owned entities as well as some private sector businesses, abound.  Poor and deteriorating financial results, high staff turnovers, lack of strategic direction and transparency as well as little to no stakeholder communication, are but some of the symptoms of a poorly performing board.

More often than not, the “trying economic times” are blamed for poor performance, but while tough economic conditions may increase the pressure in the boardroom, it should not be used as a catchall excuse for the overall poor performance of the board.

The reality is that stakeholders across a wide spectrum are becoming less forgiving of poor board performance despite a more complex and competitive operating environment. As such, it is time for businesses -- whether state-owned, public, private, profit or non-profit -- to take board evaluations far more seriously and use the results thereof to drive a culture of continuous improvement. Gone are the days that board evaluations can be viewed as a ‘tick box’ exercise for compliance purposes only. Board evaluations in fact act as a ‘dipstick’ to assess the overall ‘health’ of the board, its committees and individual directors, in much the same way as a dipstick of a vehicle is used to assess the oil level in the vehicle. The board evaluation, if properly performed, can provide early warning signs of trouble in a manner which enables the board to proactively address any potential performance and compliance issues.

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