5 warning signs of a governance problem

By Pascal Levensohn

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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