5 warning signs of a governance problem

By Pascal Levensohn
5 warning signs of a governance problem

If you have been experiencing any of the following in your boardroom, you are already late in acting to improve the quality of your board. Either you have a governance problem now, or one is coming.

• Absence of a rigorous process in defining a long-term, forward-looking business strategy.

• Poor communication between the company’s owners and its professional managers.

• Significant turnover among the second layer of the company’s senior executives combined with very long tenure by the top layer of senior executives -- conditions that have not been accompanied by strong business performance over the past three to five years.

• Board meetings that are too comfortable and always follow a familiar pattern: Nobody challenges anyone in the board meeting on any topic that is material.

• Everyone sitting at the board table is a family member, longtime family accountant, family estate lawyer or close friend.

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