How Well-Run Boards Make Decisions

In the aftermath of seismic debacles like those that toppled Enron and WorldCom, corporate boards have been shaken up and made over. More directors are independent these days, for instance, and corporations now disclose directors’ salaries and committee members’ names. Research shows that most of the changes are having a positive effect on companies’ performance. They are primarily structural, though, and don’t go to the heart of a board’s work: making the choices that shape a firm’s future. Which decisions boards own and how those calls are made are largely hidden from the public. As a result, boards are often unable to learn from the best governance practices of their counterparts at other companies.

This article pulls back the curtain and provides an inside look. Drawing on interviews with board members and executives at 31 companies, along with a close examination of three boardroom decisions, the author identifies several formal processes that can help companies improve their decision making: creating calendars that specify when the board and the standing committees will consider key items; drafting charters that define the decisions committees are responsible for; and developing decision protocols that divvy up responsibilities between directors and executives. The author also identifies a number of informal decision-making principles: Items that are strategically significant and touch on the firm’s core values should go to the board. Large decisions should be divided into small pieces, so the board can devote sufficient attention to each one. Directors must remain vigilant to ensure that their decisions are effectively implemented. The CEO and either the nonexecutive chair or the lead director should engage in ongoing dialogue regarding which decisions to take to the full board and when. And directors should challenge assumptions before making yes-or-no decisions on management proposals.

Time Management is Obsolete: Develop and Sustain High Performance through Energy and Mission Management

In a recent meeting an industry colleague pulled out the latest version of his brand of PDA. He demonstrated the bells and whistles and swore that his use of the device was the key to his successful management of every area of his life. He attributed his success to better time management.

I used to believe that my PDA was the key to balancing my life as well as it allowed me to multi-task while remaining in touch and managing responsibilities. Imagine my horror upon learning that a recent University of London study showed that over time, constant email checking on a PDA while engaged in meetings and other activities (e.g. driving) can result in an IQ falling by as much as 10 points. When you are multi-tasking you are not fully engaged in anything and the brain drain is equivalent to missing an entire night of sleep. Who can afford that kind of loss over time? How can highly successful executives maintain their best performance with this type of “learned” handicap?

In today’s fast-paced business environment, I think that “time management” is an incomplete concept and is, more appropriately, simply just one tactic in each executive’s personal strategy for success. Success requires sustaining high performance in all areas of our lives. Is it possible for executives to perform at optimal levels while juggling multi-faceted lives that include components like work responsibilities, child-rearing, elderly-care, household issues, community involvement, fitness programs and spiritual time? Ultimately, without giving conscious thought to our precise behavior, we do few of these things well.

The newest thinking and one of the best practices in coaching for improved executive results is that of Energy Management technology. The concept supporting this technology leans heavily upon generally accepted truths about human nature and performance that can be found in sports or in the military. In Energy Management technology, a human being is fundamentally an energy/life support system for completing a mission.