Although this is not a nice thought, it is of course true. This book by Bob Garratt, originally published in 1996, and fully-revised in 2011, is worth another look.
Looking at the duties and responsibilities of directors, Garratt traces the major changes that have occurred since the first edition and encapsulated the current expectations that all stakeholders have of directors following a turbulent time on the corporate landscape.
The book, which also explores the responsibilities of directors in not-for-profit and public sector organisations, is organised into four parts all of which contribute to effective board performance.
Part One provides a framework for board effectiveness through a study of corporate governance. Garratt outlines the role of ‘director’ and clarifies the differences between managers and directors, whether the latter are executive, non-executive or representative. He explains how boards’ authority has been diminished over time and suggests this is a prime cause of many of the organisational failures of the recent past.
Focusing on the need for a learning board in Part One, in Part Two the performance aspects on policy formulation and strategic thinking are developed. Part Three examines directors’ responsibility for supervising the conformance of managements’ accountabilities and actions to the values of the organisation. Here, Garratt stresses the need for effective value statements and the need to possess monitoring processes to check performance against them. In the final part, he outlines a detailed process for appraising boards and individual directors and suggests how corporate governance must be continually reviewed and its reach extended to incorporate changing societal concerns such as sustainability.
The book concludes with the texts of the UK Corporate Governance Code, the UK Stewardship Code and the King Code of Corporate Governance Principles, an excellent index and full textual notes.
Every director and manager aspiring to a directorial role should be required to read this outstanding work. It is the product of an academic study applying research and thinking to a practical issue and producing a highly readable and useful text.