SCI Book Highlights

The Imperfect Board Member
Discovering the Seven Disciplines of Governance Excellence

Description [excerpted from the book]: Meet David Slater. He is an ambitious and overcommitted executive who is struggling to lead his business through its first year as a publicly traded company. Of all his challenges, his board of directors is the most frustrating. He thinks everyone else is the problem. But he’s “the imperfect board member.”

Support comes from a most unlikely source—a fellow director on the board of a community recreational association. As they volunteer together, David discovers the seven disciplines that will enable any board to lead effectively.

Presented as a captivating leadership fable, The Imperfect Board Member brings the disappointment and dysfunction of boards to life.

Amazon: The Imperfect Board Member: Discovering the Seven Disciplines of Governance Excellence

Quotes from the book that we believe are relevant to small-cap leadership:

[from the preface] “…but even more, The Imperfect Board Member is a book for actual board members. The author – a friend of mine – often jokes that a greeter at Wal-Mart gets more orientation than most board member ever do. We all know that’s no joke. It’s true for boards of every description. And it’s appalling. Although it sounds extreme, management guru Peter Drucker wrote, ‘There is one thing all boards have in common… They do not function.'” 

“Typically, CEOs and executive directors considered the board to be a necessary nuisance. Neither board members nor senior executives considered board coaching or director development to be of consequence. Indeed, there seemed to be a stigma that accepting any such service would be tantamount to admitting they were not qualified to be at the board table.”

“Since the board’s job of directing and protecting is to be done on behalf of owners and in their best interest, it’s best if the board is made up of owners.”

“As successful as most of the previous directors had been in their fields, they certainly did not understand CommuniTrek or the communications business like he did. Offering just the right amount of technical jargon and market data could shift the group into ‘nodding’ mode. David could easily recognize when people began agreeing with things when they did not really understand them.”

“David, you’re a CEO. You’re used to managing daily operations. Operations demand speed. In that setting, it’s often better to make decision knowing some will be wrong than to deliberate over issues and fail to act. But governance demands prudence. Directing and protecting well requires several people, not a lone ranger.”

“The only way a board can responsibly do its job without meddling is by monitoring very well. So the reports that the board receives are absolutely essential to enable it to keep control without interfering. They ought to keep their noses in but their fingers out!”

“What do shareholders expect? That’s who the board really works for. And what do the board members expect? They have to be jointly committed to a role and a design for governing the organization.” 

‘”The media have projected a paranoid notion that corporate directors are essentially lazy, selfish fools. That’s rarely the case. Indeed, behaviors that give the appearance are more likely rooted in poor governance design that in the abilities of the directors.”

“Obviously many boards inherit a CEO, but it’s still their responsibility to decide if that person is the right one to lead the operations going forward. And, on an ongoing basis, the board needs to monitor how things are progressing.”

“Organizational results are a product of all the efforts of everyone in the organization. The board’s responsibility is simply to reflect on these results.”

“The sad reality is that boards from every type of organization are suffering from an epidemic of self-importance. It’s as if directors take their seat on a board and immediately assume they know what the owners want and believe. Amazingly, many directors don’t even own shares of the company they govern. Board members seem to be willing to think for the owners, but – more important – they’re supposed to think of the owners.”

“Boards must develop a system and practices for monitoring the organization’s progress so that corrective measures can be applied if they get off course. They’re trustees on behalf of the owners to ensure that the organization’s purpose – which is the motivation for the owners to have a stake in the enterprise – advances as much as possible. The most pivotal person in making progress happen is the CEO.”

“Chuck was the one to respond to this. ‘There are always risks in delegation. But delegation is the road to multiplied results. When we work together as a team, with every person playing their part, we share more victories. Think of a baseball pitcher. Like it or not, a lot of weight rests on that role. The wisest thing a team can do is select someone with great talent and delegate the responsibility to him. No sense having the second baseman running in to pitch every now and then. Likewise, there’s no sense in a board trying to be the CEO. However, a CEO will have limited success if she doesn’t have the support of the board team around her, just as a pitcher will do poorly if the other eight players on the field are not pulling their load.'”

“‘I say that the control question is a bit of a red herring anyway,’ Chuck contributed. ‘If the board is doing its job, its concern will be progress, not control. It will have systems to monitor results and compliance rather than relying on board members sticking their fingers into the details.'”

“Board members must feel the impact of their decisions and their leadership as much as, or more than, any other shareholder.”