The crisis: Mobilizing boards for change - The McKinsey Quarterly - Mobilizing boards for change - Governance - Boards
The crisis: Mobilizing boards for change
To meet the challenges of the economic crisis, corporate boards must change the way they work.
FEBRUARY 2009 • Andrew Campbell and Stuart Sinclair
Excerpts:
As companies grapple with uncertainty of a magnitude that few have experienced before, their boards should begin by questioning fundamental strategic assumptions: Is our view of the market realistic? Does our financing strategy take into account the new conditions? Should we reset the incentive scheme or abandon any approach based on share prices? Can we exploit the current glut of talent? How can we take advantage of the pain our competitors are experiencing?
Unfortunately, most corporate directors are likely to assume that radical change is unnecessary and that “normal service” will soon resume. Their experiences during less severe crises—such as those in 1990, 1997, or 2001—will lull them into a false sense of complacency; few will adjust their strategies and policies sufficiently. This behavior is the result of a clinically observed human trait of being overly influenced by past experiences and judgments. Experts on decision making call it anchoring. The problem is made worse by the natural rhythms that characterize how many boards are used to working—rhythms that tend to reinforce rather than challenge anchored thinking. We therefore argue that board chairmen need to play a special role in the coming months by challenging their boards to think things through afresh.
Read full article: http://www.mckinseyquarterly.com/Governance/Boards/the_crisis_Mobilizing_boards_for_change_2300
***********************************************************************
This posting was made my Jim Jacobs, President & CEO of Jacobs Executive Advisors. Jim also serves as Leader of Jacobs Advisors' Insurance Practice.
No comments:
Post a Comment