Our Thinking

How we think about board effectiveness

We base our work on a few essential principles, particularly

• A board exists to help lead a business better for the long-term benefit of its stakeholders, particularly but not only its shareholders
• Governance structures and processes need to be recognisable to shareholders, but that isn’t where to start – the primary objective is good outcomes
• The foundation of any board’s effectiveness is in having a commonly understood idea of what the role of the board is, and of the individual directors within it
• Behaviour is what matters most in achieving good outcomes. Structures and processes can help or hinder, but rarely determine, how well the board works towards good outcomes
• A good board should work in a way that increases the chances of good decisions being made
• A board which demonstrates ethical behaviour in its own work will stand a better chance of finding good behaviour in the organisation

In order to help us look systematically at how firms exercise good governance through an effective board, we have developed a model which covers the main elements, under the two headings of What The Board Does and How It Does It.

This model is the part of the iceberg that can be seen.  Under the surface is a very large body of knowledge about board effectiveness, which covers all of the topics identified in the CGI Guidance and many others besides.  For more of our published insight into board effectiveness, see our guidance and insights.

Board Effectiveness Guidance