22 Questions for Diagnosing Your Board
59Source: Harvard Business Review
If you answer yes to all 22 questions, you have an exemplary board.
1. Are these three or more outside directors for every insider?
2. Are the insiders limited to the CEO, the COO, and the CFO?
3. Do your directors routinely speak to senior managers who are not represented on the board?
4. Is your board the right size (8 to 15 members)?
5. Does your audit committee, not management, have the authority to approve the partner in charge of auditing the company?
6. Does your audit committee routinely review “high-exposure” areas?
7. Do compensation consultants report to your compensation committee rather than to the company’s human resources officers?
8. Has your compensation committee shown the courage to establish formulas for CEO compensation based on long-term results – even if the formulas differ from industry norms?
9. Are the activities of your executive committee sufficiently contained to prevent the emergence of a “two-tier” board?
10. Do outside directors annually review succession plans for senior management?
11. Do outside directors formally evaluate your CEO’s strengths, weaknesses, objectives, personal plans, and performance every year?
12. Do your nominating committee rather than the CEO direct the research for new board members and invite candidates to stand for election?
13. Is there a way for outside directors to alter the meeting agenda set by your CEO?
14. Does the company help directors prepare for meetings by sending relevant routine information, as well as analyses of key agenda items, ahead of time?
15. Is there sufficient meeting time for thoughtful discussion in addition to management monologue?
16. Do the outside directors meet without management on a regular basis?
17. Is your board actively involved in formulating long-range business strategy from the start of the planning cycle?
18. Does your board, rather than the incumbent CEO, select the new chief executive-in fact as well as in theory?
19. Is at least some of directors’ pay linked to corporate performance?
20. Is the performance of each of your directors periodically reviewed?
21. Are directors who are no longer pulling their weight discouraged from standing for reelection?
22. Do you take the right measures to built trust among directors?
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Comments
Hi Jennifer,My boss (our EVP) maybe was once a subscriber of Harvard Business Review because there were some volumes on the shelf. He died 5 years ago and already 5 general offices cleaning were done but I refused to junk these papers. Last week I got bored replying to bulk of communication from client... whew lots office problems. Then, I took Volume 71, Number 2 and I scanned pages the March-April 1993 issue. There were some articles that are still adaptable even for more than a decade; this article is one of them. So, I retyped it. It's worthwhile to share the thoughts that had been stored for almost 15 years rather than criticize as always read in newspapers.Thanks for the comment Jen ;)
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Jennifer says:
11 months ago
Does Harvard know that you copied their article and posted it here? Do you have their permission?