Board composition

Abstract

How do effective directors ensure that the composition of the board is optimised with respect to the long-term success of the organisation? Based on a framework of global corporate governance best practice, which can be used in all organisations anywhere in the world, this chapter of Questions To Ask (QTA), in the boardroom, gives a high-level but succinct introduction to the composition of boards. Board composition is one of the keys to good governance. Getting the right people around the board table does not guarantee the company will be effectively governed, but not doing so guarantees that it won’t be, no matter how good the policies and processes you put in place. The chapter considers board composition from the perspectives of attributes, acknowledging that even companies with a relatively simple business model may struggle to find room for all the attributes they would ideally want the board to have. The chapter’s introduction leads into outlining the key Questions To Ask in the boardroom, giving the reader further insight into how to initiate discussions about priorities for the composition of the board. The suggested questions cover: board size, expertise and independence, executive directors, “fit” versus diversity, bringing outsiders in, and refreshing the board.