A hint of disapproval wafts across the meeting table as directors watch a colleague shuffle through the board packet for unread financial statements. I took the time to prepare, why didn’t you?
At another table in another boardroom, the air is toxic with a plot to oust the CEO. Should I believe what I’m hearing or your lying eyes?
Certainly, it’s a long way from attending a meeting unprepared to attempting a boardroom coup. Most corporate directors approach
their board responsibilities seriously and with good intentions. And legitimate contingencies can sometimes prevent full engagement.
But directors can and do create problems. Whether through inattention or ill intent, they can detract from board effectiveness and disrupt the balance of interests, ego, and power.
Boards of directors help set a tone that seeps throughout an organization’s culture, and confirm that an organization actually behaves in the way it promises to behave. When the board doesn’t do its job, things can go very wrong.
A recent Grant Thornton webcast, “Reputational risk: Protecting the good name and reputation of the not-for-profit organization and its board,” explored ways to keep a non-profit on track, with the recent Penn State scandal emerging as the prime example of inadequate governance. Penn State wasn’t on the prepared webcast slides, but clearly on presenter Larry Ladd’s mind as he fleshed out how things can explode when a board fails.
Ladd currently is Grant Thornton’s director of national higher education practice, and a past administrator at both Harvard and Tufts universities.
A BOARD “NOT DELVING DEEPLY ENOUGH”
“Think of how culture and governance of the university allowed bad behavior to remain unreported for approximately 2 decades,” Ladd said in reference to the Jerry Sandusky sexual abuse scandal.