A lack of leadership: A McKinsey survey of corporate directors
Editor’s note. When we published this article in February 2009, we invited directors to take an online survey to gather their opinions on how boards were responding to the economic crisis. Here is a summary of their responses.
Only half of board members say their boards have responded effectively to the global economic turmoil. However, many corporate boards have adjusted their practices, and more want to do so.
Many boards of directors are not providing the leadership demanded by the global economic crisis, according to a McKinsey Quarterly survey on the board’s role in the current economic environment.1 While half of board members describe their boards as effective in managing the crisis, just over a third say their boards have not been effective; 14 percent aren’t sure how to rate their boards’ effectiveness. At the personal level, roughly half of corporate directors say their boards’ chairs haven’t met the demands of the crisis, and a nearly equal percentage of board chairs believe the same about their board members (Exhibit 2). Though most boards have implemented various changes to their procedures in response to the crisis, 62 percent say their boards need to change even more…………………
This survey may seem to deliver good news: half of the board members think their boards are doing a good job of tackling today’s challenges. However, switching from a glass-half-full to a glass-half-empty mentality, it is clear that most boards need to do more. Because human judgments are heavily influenced by past experiences and previous decisions, we need to disrupt our normal thought processes or jolt ourselves with new experiences if we are to challenge our presumptions fully and make wise decisions in today’s conditions. Another meeting with the same people in the same room won’t suffice.
One of this survey’s implications is that boards need to focus on innovation. In terms of creative thinking, this is sound advice. But organizations should also reconnect with their core mission and core capabilities. In uncertain times, going back to the core is often wise.
About the Authors
Andrew Campbell is a director of London’s Ashridge Strategic Management Centre and has written more than ten books based on his research. The latest, Think Again: Why Good Leaders Make Bad Decisions and How to Keep it From Happening to You, is coauthored with Sydney Finkelstein and Jo Whitehead (Harvard Business Press, 2009). Stuart Sinclair is chairman and nonexecutive director of several companies in the United Kingdom and Eastern Europe and was previously the CEO of Tesco Personal Finance and GE Capital China. The opinions he expresses here are purely his own.
Complete article at http://www.mckinseyquarterly.com/Governance/Boards/the_crisis_Mobilizing_boards_for_change_2300?pagenum=2 Readers are required to subscribe free