Review of “Building Better Boards” Article by Nadler

Subject: Employee Management
Pages: 2
Words: 548
Reading time:
2 min
Study level: College

Introduction

In “Building Better Boards,” Nadler (2004) argues that companies’ executives should dedicate more attention to the establishment of boards. In general, boards and board members are concerned with the discussion of issues that a business faces and in helping the management select the direction and strategy for future development. As such, board members do not have a direct impact on the management of the operations. Nadler’s (2004) article is about creating high-performing boards, the ones that contribute to the company’s success and add value to the business. The author offers a set of recommendations, such as using data, self-assessments, and managing the board’s agenda adequately as effective strategies for addressing the issues that a typical company board faces.

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Problem Identification

Boards are often viewed as a requirement made by the institutions such as the New York Stock Exchange or other stock exchange organizations. However, Nadler (2004), Sonnenfeld (2002), and Montgomery and Kaufman (2003) all highlight the benefits that a good company board provides for the business. Hence, this element is often overlooked by the executives, and the boards are formed without formal criteria or careful consideration. Another issue Nadler (2004) identifies is that board members are often scared to become a part of a corporate scandal, which is why compliance and regulation become the central driving forces of a board’s functioning. However, this eliminates the opportunity for a challenge and innovation because strict regulations do not allow boards to function and come up with the outside-of-a-box solution.

Conclusion

In summary, the article in question discusses the inconsistency of the existing company boards and how strict regulation and improper approach to selecting board members and regulating their work fails to contribute to the company’s success. Hence, executives have to pay more attention to their self-assessments and to the way they approach the selection of the board members. As a result, a company will have a high-functioning board that is capable of resolving issues effectively and developing innovative solutions to problems.

Recommendation

The construction of a board should be viewed as an important matter for the future development of a business; hence, the first thing that the company’s CEO should do is recognize the importance of this management element. Next, as Nadler (2004) recommends, “the best boards begin with rigorous self-assessments,” which means that both the organization’s environment and the potential board member’s experience and backgrounds should be analyzed (p. 1). Montgomery and Kaufman (2003) argue that not only managers but also shareholders and board members share the responsibility for the company’s success.

Hence, another recommendation is to ensure that the board members recognize this responsibility and act in accordance with it. In this sense, adequate exchange of information becomes essential for ensuring the successful functioning of the board. Finally, Nadler (2004) recommends using all the data available to the managers, such as surveys and statistics, to both form the boards and inform the decision-making process. Therefore, collecting data and performing self-assessments on a regular basis becomes essential for adequate decision-making. Sonnenfield (2002) also recommends creating the right culture, where trust and engagement of the board members become central. In this way, the management of a business can ensure that the board members are truly concerned with the problems at hand and that they can help this company succeed.

References

Montgomery, S. & Kaufman, R. (2003). The board’s missing link. Harvard Business Review. Web.

Nadler, D. A. (2004). Building better boards. Harvard Business Review. Web.

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Sonnenfield, J. (2002). What makes great boards great. Harvard Business Review. Web.