The impact of board dynamics on shareholder value creation
Despite the lengthy processes used by most executive leadership teams to select individual members, a 2014 report (summarised here – by The Conference Board) has shown that the top team has a significantly greater impact on corporate financial performance than any individual director alone.
The research demonstrated a direct link between director characteristics (professional and social capital) and corporate profitability. However the impact of the collective board behaviour was shown to have an 800% greater impact on a firm’s performance compared with that of individual directors.
In our experience, those teams that are called by a much greater purpose and legacy strive to create something unique – something that in parallel none of them would be able to do. One leader described it as the ability to ‘positively surprise each other’.
They create a way of being that is very difficult for their competitors to copy – it is unique to them and generates significant value and innovation to the organisation. At some point in their career most people have experienced this sense of being part of a high performance unit, but it’s difficult to explain exactly what caused it. Our 6 practice model looks at some of the conditions that need to be in place to allow high performance to emerge and flourish. Read more here