Build balanced Boards to promote challenge and chair them to consensus decisions.
The Chairman’s nature and motivations are largely responsible for determining whether the Board creates a ‘Spirit of Corporate Governance.’ Personal aggrandisement and Machiavellian game playing harvest fruit which may not be for the common good.
Each Board member determines what is ‘good’ and ‘right’ informed by their personal logic, interest, values and emotions. Healthy debate, orchestrated by the Chairman, considers diverse views in order to identify a range of options. Exploring both short and long term implications informs choice.
Consider the production company, obliged to reduce costs to mirror reduced revenues. In choosing between property and headcount, the latter are assumed to be the easier ‘quick win’ target and competitive capability is lost. While some capability remains in the marketplace, permanent loss is inevitable.