These are a few thoughts following a read of “More meetings, so more pay for OCBC directors” in the Business Times of 26 Apr 2012.
Do you know what a Board of Directors does? Why is it there in the first place? Well, as far as I understand it, a Board of Directors is to provide direction to ensure that the company maintains a profitable course. In order to do that, they keep tabs of reports, get feedback from the EXCO, and monitor all the Management Indicators – to the uninitiated, that means “tell-tale signs” – and other vital signs that indicate the presence of vibrant, intelligent life. Vital signs that would seem to indicate that the company is healthy, engaged in productive work, is generally happy with life, and supposedly makes clients happy as well. I’ve never been on a Board, but I expect that what’s been alluded to would comprise pretty much most of what a Board would be expected to do.
One of the things Boards do is conduct meetings. Do you attend meetings? What do you do in meetings? Do you get progress updates from other members, and perhaps deliver some updates yourself? Well, Board meetings aren’t supposed to do that, from what I know. Board meetings are supposed to be generative in nature, and the meetings are confirmatory platforms for decisions that largely already been arrived at, barring the introduction of new information. A good Board would not have to meet more times than what has already been scheduled. If it does, it could very well mean that a crisis is brewing, or some volcano has already blown its top. With all the accumulated experience and wisdom present in some Boards, and probably alleged to be present in others, we would expect that one of the Board’s functions would be the detection, identification and neutralization of threats to the company’s vibrancy. Implicit in that statement is the fact that Boards should also ensure that the EXCO embarks upon pursuits that enhance vibrancy, and that the risks accompanying such pursuits remain reasonable.
Boards are compensated according to the value they provide in helping to ensure that the company remains sustainably profitable, ja? How is it then that when a Board finds it necessary to meet more times than what was scheduled, the members are paid for their time? If there was some unexpected, we-could-not-have-seen-it-coming type of event happening, such as a small meteorite hitting the company headquarters and wiping out half the EXCO and a lot of vital records, then the Board would be very well compensated for spending extra time, as they might then have steered the sinking ship out of danger.
If you happen to be on a Board, Steering Committee or some similar role, think about what you’re supposed to do. You’re not a daily-rated worker, so quit acting like one and start maximizing value. Remember, that’s why you’re so highly paid.