Top Hallmarks of High-Performance Boards

Effective hallmarks of high-performance boards are being able to find the optimal balance between these components: to represent the interests of shareholders and control management, without slipping to the level of operational control of the management’s work.

What Do the Hallmarks of High-Performance Require?

Many companies have a dedicated crisis manager or “high-performance” position. Its main task is to help the organization in solving issues related to problems of a crisis nature: political, economic, social, and others, which the organization faces and which, as they develop, cause a crisis.

It is important to note that the improvement of hallmarks of high-performance boards, along with the development of new approaches both in the legislative sphere and in practice, leads to the need to take into account the internal connection between management and the risk of bankruptcy of the organization. The ongoing bankruptcy procedures for many enterprises are designed to facilitate the emergence of new owners and managers who are able to function effectively in compliance with the current legislation. Therefore, a comprehensive analysis of the causes and forms of manifestation of bankruptcy as some result of crisis processes at the enterprise allows us to determine the appropriate anti-crisis procedures and management decisions.

These hallmarks of high-performance boards require:

  • a comprehensive analysis of trends and problems in the management of socio-economic systems;
  • determination of the main approaches to improving the organizational and economic mechanism of enterprise management;
  • development of a methodology for carrying out transformations at the enterprise within the framework of modern management approaches;
  • creation of a control system of transformations in order to ensure high efficiency of the enterprise.

The assessment of hallmarks of high-performance boards should be based on the goals and objectives set out in the regulations on the board of directors and in the work plan of the board approved at the beginning of the year. The Board, as a collective body, carries out strategic management of the company’s activities, determines the vision of the company’s long-term development. Often, the rating systems adopted by companies consider the quality of the Board of Directors from only one of the above parties. Accordingly, the assessment of the work of the Board of Directors should be carried out in all the specified areas.

The Main Characteristics of Hallmarks High-Performance Boards

The main purpose of hallmark high-performance boards is to determine the degree of effectiveness of its work as a collective governing body, and how the activity meets the needs of the company’s development. With proper preparation and proper assessment, this process should stimulate discussion of the role and functions of the Board of Directors, work priorities, existing procedures, a combination of knowledge, skills, experience, and personal characteristics that the Board as a whole should possess, information support of the Board’s activities, the role of committees (if such are created as part of the Council), the practice of preparing and holding meetings, their regularity.

Seven characteristics of a high performing board are:

  • Days per year.
  • A genuine commitment to excellence.
  • Increase directors’ exposure to the business.
  • Nurture the senior management team.
  • Keep a tight focus on risk and risk management.

However, if the issues of hallmarks of high-performance boards, production processes, services, goods are paid close attention at all levels of management and in scientific discussions, then the issues of reforming the supporting subsystems remain not sufficiently studied. This fully applies to the development of approaches to reforming personnel management systems in the context of the transition to a new technological order.