The article uses examples from NASA (HST), Volkswagen, and Wirecard in order to show how boards can miss early warning signs of danger. It stresses the importance of not just recognizing these warning signs, but also to act on these signals. This can be accomplished through a well-organized review process for boards, which helps to evaluate their performance and effectiveness.
The authors stress the need for boards to look at their own performance, and the performance of the of the organisation, to identify gaps and opportunities to improve. They also stress the importance of using the expertise of outside consultants to ensure that the agenda of the board is comprehensive.
A board room review is an evaluation of the effectiveness of the board of directors as compared to the ideal demands for the business. It could be an internal assessment using a world class benchmarked tool, such as those from Board Surveys, or a unique external evaluation specific to the needs and requirements of the organisation.
It is important that the boardroom is an environment where employees are able to freely and honestly. They should be able to concentrate on the task at hand without being distracted or interrupted and they should feel at ease discussing sensitive subjects. A conference room with large tables and chairs, a soundproofing environment to keep conversations private and advanced technological equipment like Bloomberg plug-ins or cutting-edge quotation systems can aid. Virtual meeting rooms allow participants to attend meetings from their workplace, home, or even on an airplane. This makes the process more convenient.
