What Are Boards Obligated to Know?

There are things you know. And things you don’t know. In the latter category,there are things you know you don’t know, and things you don’t know you don’t know But are there things you’re ethically obligated to know? The short answer is “yes.” But the harder part is identifying just what things you are obligated to know, and what behaviours you are obligated to engage in, in order to raise the chances that you’ll know the things you ought to know. The blog entry linked below tackles this question with regard to corporate boards. >>>

LINK: What are corporate boards ethically obligated to know? (by Chris MacDonald and Hasko von Kriegstein for Canadian Business)

…That’s why our research is focused on the wide range of structural and procedural principles that we argue boards ought to attend to. The right structures and procedures need to be in place to make sure (or to make it more likely) that boards will be diligent and effective in their pursuit and use of information.

So, for example, how do you ensure that boards will seek and appreciate a wide range of information? Start by having a nominating committee that is dedicated to seeking out real diversity. How do you make sure that boards have the right expertise to make good use of the financial information available to them? Implement a ‘board skills matrix’ to identify gaps in their collective knowledge. How do you make sure that boards make proper use of consultants? Make sure the board has the appropriate budget, but also implement policies to reduce redundant use or other kinds of over-use of consultants of dubious value…..

What do you think?

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