In times of crisis many boards will be forced to revisit the line between board and management. When survival is on the line, the board needs to have its hand on the wheel, and be much more closely involved in the operations of the business. This is not problematic, and is to be expected in an effective governance structure
When monitoring change management or major project delivery, too many NEDs are primarily focused on the budget and timetable. And they are important. But the number one priority MUST always be the benefit – “is there actually change happening ?” “Are we actually going to see the outcomes?”.
Rather than being seen as interventionist, deep dives should be seen as critical when a board is approving unfamiliar and high risk projects
Some boards allow management to spread attention too thin and focus on too many little things. The right approach is bigger bets in fewer places.
Corporate governance is rather like hospitality staff: when it’s good, you barely notice it’s there, but when it fails it can completely ruin your night.
Most Australian company directors are very aware of the Centro case. The case has very clear implications for how directors deal with and review the company accounts. But I think the broader implications of this case are too frequently missed. More than just financial accounts, Justice Middleton’s judgment sets down how directors must deal with a range of complex issues that go to the survival of the company.