07/09/2004 - 22:00

Jauncey plan targets strategy deficiency

07/09/2004 - 22:00

Bookmark

Save articles for future reference.
Jauncey plan targets strategy deficiency

A fixation on how boards work may well have been an academic interest until recently, but the rising focus on corporate governance gives Sue Jauncey’s decision to specialise in board evaluation a timely commercial edge.

A psychologist who worked in the State’s prison system before entering the corporate world and working with the now defunct Andersen accounting group, Ms Jauncey has started applying her system to boards in Western Australia as a manager, performance consulting, with executive search and consulting firm Gerard Daniels Australia.

Ms Jauncey said that, with a handful of organisations having used her Board Value Maximisation Program to evaluate their board structure and performance, she had embarked on an overseas tour to explain her work to those interested in corporate governance elsewhere.

She said the idea was largely  formulated during her time researching boards and remuneration here and overseas while at Andersen, which had issues of its own that ultimately led to its failure.

“I wanted to know how best to organise a board so they felt confident, clear and objective with the competency and skills that were needed for their strategy,” Ms Jauncey said.

“There was a lot of doubt about these in this in the boards I looked at.”

Ms Jauncey said her profiling system, for which she was currently seeking copyright, provided a matrix of a board’s abilities across the key areas and highlighted deficiencies.

The scoring system is based on questions focused on the organisation being looked at and involves an independent panel of experts.

Using the results it graphically depicts where a board has adequate skills and where it is lacking, highlighting where and how improvements could be made through such things as a professional development plan.

“It clarifies the skills and experience needed to run a board,” Ms Jauncey said.

She said that, from her research and early use of the evaluation system, a common deficiency in boards was strategy.

“Strategy is our biggest issue. There are still some that are unsure about strategy at board level,” Ms Jauncey said.

“Being forward thinking and visionary about setting direction is not an easy skill. Most boards spend their time reacting to managerial and operational issues.

“Most board members know what the key strategy is, not all the board members are always aligned in this respect. Sometimes they are still exploring that, but if you don’t have a clear focus on that you can’t go anywhere. The clearer the objective the higher the likelihood of achieving those objectives.”

Risk management is another area that consistently stands out as an issue.

“That is a real skill and, let’s face it, the purpose of a board is to try to pick up things before they occur.”

Other big issues are communication between boards and management, and governance, though the latter is improving, she said.

But one of the dangers that performance reviews should seek to identify and remove was the loss of independent thinking at board level.

“One of the biggest issues was leaning towards group thinking at board level,” Ms Jauncey said.

“These are highly intelligent, credible people.

“Where you might stand up and lead as a manager, on a board you tend to sit back and not say anything; that is common even with big companies.

“You stop exploring your own thoughts and ideas and start adopting those of stronger personalities. You lose independent thought.”

 

Common Issues for Boards

  • Confusion – too often board members are at odds with others.
  • Strategy – board members often unaligned when it comes to board strategy.
  • Reactionary – too much time spent reacting to managerial and operational issues.
  • Poor clarity – the clearer the objective is the higher the likelihood of achieving it.
  • Gaps in risk management – ultimately the real purpose of a board is to try to pick up things before they occur.
  • Internal communication – often deficient between boards and management.
  • Group thinking – board members stop exploring being independent and adopt the views of stronger personalities.

STANDING BY BUSINESS. TRUSTED BY BUSINESS.

Subscription Options