Australian boards more effective than global counterparts

Australian boards compare well with their European and US counterparts when it comes to involvement in decision-making and stewardship, research shows.

A global study into board effectiveness has revealed that some country’s boards are merely ratifying bodies.

But Rosemary Howard, executive director of AGSM Executive Programs, said that Australian boards are more proactive and involved in business decision, although that doesn’t make them immune to being ill-informed by management.

“Improving board effectiveness is absolutely critical as the current economic environment focuses its spotlight on the performance of Australian boards,” Howard said.

“There is an increasing awareness of the need for on-going professional development for board members just like there is a need for professionals such as accountants and doctors to continue to build upon their skill base.”

Howard has been working with leading board researcher Professor Andrew Kakabadse, from Cranfield University, to develop an Achieving Board Effectiveness Program that identifies the key opportunities and challenges facing Australian boards today.

Kakabadse said: “I’ve spoken to quite a number of CEOs across the world who think it’s very easy to pull the wool over the eyes of the board of directors. Positioning information to get the go-ahead required isn’t too difficult once they are cognisant of board dynamics, how boards run, and understand their purpose.

“Our studies show that the greater the number of processes, procedures and rational approaches to ensuring that governance happens, the less governance actually takes place and, consequently, the lower the level of accountability.”

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