The issue of raising the bar on the board is becoming increasingly critical to long-term success in an increasingly complex marketplace and environment of increased investor and governmental scrutiny. This is particularly the case with boards of many small to mid-cap businesses, not for profit boards and boards with low turnover and directors who are well past normal retirement age.
Boards have often developed a “culture of entitlement” and mutual self-protection i.e. “I’ll protect your place at the table, if you’ll protect mine.” Given the sense of threat in the current national scenario of increased liability for directors, the difficulty is that the more capable directors, and CEOs, look around the table and become concerned about the “lump under the carpet.” They discuss behind the scenes, “What do we do to “raise the bar” for directors on our board when they are our friends, and we have served together so long, on this board---and often on other boards.”
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