Behind every high-performing board is strong board leadership; yet, the role of a board leader can take many different forms. Not only are there varying structures of board leadership (combined chair/CEO, independent lead director, etc.), but the leadership styles differ per person, and the culture and the challenges differ per board. So, then, what defines an effective board leader?
In this episode, Brad Oates, board member with CIT Group/CIT Bank and also a former NFL player, establishes a baseline for board leadership and explains why nearly every successful board has elected a leader.
…it comes back to accountability. A lot of times, some boards may be reluctant to elevate somebody to a position of superiority on the board. It’s really not a matter of superiority, but [it’s about] having someone that everyone would respect–[someone] that can set the agenda, organize the meeting, and resolve the friction that may occur within the board, as well as between the board and management.
— Brad Oates, Board Member with CIT Group/CIT Bank
Board leadership may not always be a formal position, as host TK Kerstetter points out. Kerstetter and Oates discuss the responsibility each board member has to balance competing stakeholder interests. The two also discuss what a new director should do if they find that the board lacks the leadership it needs.
Finally, today’s boards continue to struggle with refreshment. According to PwC’s Annual Corporate Directors Survey, 45% of directors feel that someone on their board should be replaced.
“The metrics show there’s a governance gap or disconnect,” explains Oates. “We should be honest with ourselves that, as public boards, we have not embraced [performance-driven] accountability to the same degree from ourselves as we would expect from management.”
Oates and Kerstetter discuss the role of board leadership when it comes to ensuring the right people are sitting around the boardroom table.