The crisis: Mobilizing boards for change - The McKinsey Quarterly - Mobilizing boards for change - Governance - Boards

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:

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.

Authors’ note
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.

Read full article: http://www.mckinseyquarterly.com/Governance/Boards/the_crisis_Mobilizing_boards_for_change_2300?pagenum=2
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This posting was made my Jim Jacobs, President & CEO of Jacobs Executive Advisors. Jim also serves as Leader of Jacobs Advisors' Insurance Practice.