Reprint No. 03106
The Seven Principles of Soft Governance
1. Select the right people. Recruit directors with the courage to challenge the CEO. Look for self-confident CEO-level candidates who can engage in real debate without dragging in their egos.
2. Train, train, train. Orient new directors by arranging face-to-face meetings with all the top executives. Provide briefing books, arrange site visits, and factor in time to build relationships. Remember ongoing education for all directors.
3. Inform and communicate. Deliver relevant information early and in multiple formats. Leave time on the agenda for open discussion. Don’t skimp on site visits and retreats; they can yield give-and-take.
4. Balance the CEO’s power. Make sure only independent directors recruit new directors, control the committees’ chairmanships, hold meetings without the CEO, and control succession. Remember that committees can appropriate power.
5. Establish new behaviors. Hire CEOs who value teamwork and want full feedback. Establish a tone of collegiality and “constructive skepticism.” CEOs and directors must nurture a culture of listening.
6. Devote the time. Board membership requires time to prepare, time to discuss, time to develop relationships. All directors must open up their schedules to absorb information and make decisions.
7. Evaluate and improve. Establish a tradition of continual improvement. Directors should examine and refine practices as do other professional teams. Evaluate the CEO, evaluate the board as a whole, and evaluate individuals.
Paul F. Kocourek, [email protected] is a senior vice president with Booz Allen Hamilton in New York. He focuses on strategic transformation of companies facing changes in the competitive landscape or the regulatory environment.
Christian Burger, [email protected]
Christian Burger is a vice president with Booz Allen Hamilton in Munich. His principal areas of activity include telecommunications and technology, and the related consumer goods space. He focuses on strategic change and management control issues.
Bill Birchard, [email protected]
Bill Birchard is a writer in Amherst, N.H., whose work has appeared in Fast Company, CFO, and other publications. He is coauthor, with David A. Nichol, M.D., of The One-Minute Meditator: Relieving Stress and Finding Meaning in Everyday Life (Perseus Publishing, 2001) and, with Marc J. Epstein, of Counting What Counts: Turning Corporate Accountability to Competitive Advantage (Perseus Publishing, 1999).