The Behavioural Drivers of Board Effectiveness: A practitioners' perspective.

For more than a decade, the received wisdom has been that corporate success flows from boards subscribing to governance codes. But that reassuring assumption has been severely frayed by the financial crisis.

We must look to something more subtle and powerful. Behaviour. It is the collective and individual behaviour of a board's members that determines its effectiveness.

A seat on the board has gone from being a guarantee of elevation into the ranks of the "great and the good" to a highly visible and pressured role, exposed to constant scrutiny, sometimes by groups without any commercial experience or understanding. Corporate governance codes have evolved into a sort of insurance policy. They do not, however, create shareholder value, the ultimate measure of a board's success.

We have just tested and proven our thesis about behaviour through confidential interviews with 70 directors of companies who, between them, have sat on 200 international boards, including 60 of the FTSE 100.

We asked why people join boards - why they put their honour and reputations at risk when they may have long since passed the stage in life when they need to pay the rent and feed the family. We examined the drivers of their behaviour. And we explored how different sorts of behaviour can be managed to ensure that a board operates effectively.

We have drawn seven conclusions... Read more

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