Board directors have immense responsibility – the future of the company is in their hands and in the decisions they make. They also have responsibility to multiple stakeholders, including employees, suppliers, customers, investors and the environment. In theory, great responsibility should be accompanied by great accountability. In practice, the consequences when directors do a poor job, are minimal. While there are sanctions for dishonesty (such as disqualification or in extreme cases, such as fraud, prison), the bar for incompetence is set so high in many Western economies that the only sanction is losing their job. 

Yet the way in which Boards traditionally operate, makes mediocrity more likely than excellence. In part, this is related to obsolete assumptions about the role and functions of Boards:

  • The Board is there to set long-term strategy, so only needs to meet at bi-monthly or quarterly intervals. While this was sufficient in environments, where change happened slowly, in a VUCA world strategy needs constant monitoring and adjustment. 
  • The Board’s primary responsibility is to shareholders. A consequence of this is that discussion of short-term financial issues typically takes precedence over long-term sustainability – both for the company and for other stakeholders, including, for example, the environment. Institutional shareholders’ focus on dividends and share price rarely extends beyond one or two years. A responsible Board balances the short, medium and long-term. Its responsibility is not just to the organisation but to the system, of which the company is a part.
  • The Board adds value by challenge the thinking of the Executive. Sure, this remains part of the role. But it is only a small part of a larger responsibility – to coach and mentor the Exec. Simply asking difficult questions avoids the responsibility of raising the quality of Executive’s thinking outside of the Board meeting. This requires a deeper, continuous engagement between the Board and the Executive, where the wisdom of the former helps create the wisdom of the latter. 

So what’s the answer? How do we make Boards fit for purpose in the new environment?

  1. Coaching and mentoring must become core competencies for executive and non-executive directors. 
  2. Boards must develop deeper wiring into the organisation. Emergent issues reveal themselves first in the lower and middle strata of an organisation. Pattern sensing requires the Exec to see and react to patterns as they form. What typically happens in organisations is that the Exec reacts too late, then hangs on to the issue while it thinks about it – so it only reaches Board level when the costs of addressing the issue have escalated. If the Board and the Exec are both monitoring for emergent issues, it can radically improve response times.
  3. Let’s make better use of AI. It is gradually becoming possible to upload the wisdom of an experienced director into an AI and integrate that unique resource with coaching frameworks, making their insights instantly available. Of course, this can’t substitute for a conversation with the real person, but it will provide an instant self-check for executives.

The bottom line is that companies are burying their heads in the sand, if they think traditional boards – a structure designed 1500 years ago to support absolute rulers maintain control of a kingdom – are adequate for the complexity and immediacy of the future operating environment. Among questions we need to ask are:

  • How can we make Boards more relevant?
  • How can we measure and improve the value Boards add?
  • How can we help Boards become more aware of the undercurrents in the organisation as a complex, adaptive system?
  • How do we make the wisdom of the Board more accessible?

©️David Clutterbuck, 2025