BOOKSHELF: Great Governance: How the Best Boards Work

By: Doug Matheson
Publisher: 3media Books
RRP: $49.00
Reviewer: Reg Birchfield

How exactly should directors conduct themselves behind the boardroom door of an effectively governed organisation? Professional director and governance consultant Doug Matheson has many of the answers. And he reveals them in his latest and just released book, Great Governance: How the Best Boards Work.
Matheson has become something of student of best practice governance. His weightier 600-plus page tome, The Complete Guide to Good Governance in Organisations and Companies, has sold almost 2000 copies in four reprints since it was first published in 2004.
His latest book is stripped down, more accessible 188-page practical, how-to publication.
Matheson draws on his 30-something years’ experience as director and chairman of private, public sector and not-for-profit boards to explain just how good board should operate, confront and tackle the many and often difficult issues directors face. The book examines what he calls the “actual work” of directors and boards.
Good governance, writes Matheson, “concentrates on the future, strategy and on performance, while ensuring that all fiduciary and compliance requirements are met”.
Matheson believes that good governance is what happens behind the boardroom door, how boards actually work and how directors interconnect. “It is the value of the interplay and dialogue between directors and management and between directors that brings out the best in directors when they consider all dimensions of the proposals, strategies and decisions before them.”
Good governance is, he contends, “the added value of the range of directors’ competencies, backgrounds and perspectives that are brought to the board discussions, and that result in breakthrough decisions for the organisation”.
Matheson tackles his topic in eight logical chapters. He provides relatively brief but helpful explanation of what governance is before detailing the work of the board; explaining what goes on in board meetings; describing the critical role of the chairman; itemising the relationship between the board and the chief executive; describing the role of the board from structure to dealing with underperforming directors; itemising governance performance criteria and finally, providing advice on how to evaluate board, the chair and the performance of individual directors.
Organisations still tend, in the author’s opinion, to be over-structured, over-controlled, over-managed and under-led. Boards and senior managers don’t focus on “real leadership”, according to Matheson. They are still collectively reluctant to abandon the “command and control” model, focusing instead on providing and generating detailed data to control their organisations rather than providing information to lead the enterprise, private or public sector, into the future.
Given the corporate scandals of recent years – à la Enron and others – and the global events of recent months, Matheson believes it is time to focus on how boards should work, demonstrate accountability and evaluate their performance.
“The focus must be to achieve the best board, comprised of the best people in terms of abilities, backgrounds, perspectives and ethics, and be led by competent and visionary chairman and the right meeting agendas…” To be effective, boards must become high functioning work groups “based on culture of respect, trust and candour…”, he reasons.
Legislation, regulations, codes of practice, board processes, audit and risk management committees are important but they are not the essential features of an effective board. What is important is how effectively the chairman and directors actually work together as board and how effectively they work with management in the interests of the organisation.
No question Doug Matheson has the experience and bona fides to have written this book. It is easy reading and logical in its presentation of the practicalities and practices of good governance. It does not, as the author points out, go into or “purport to define the legal obligations and fiduciary duties of directors”. That, he argues, is well covered by legal and technical texts elsewhere. Great Governance is step-by-step handbook on how to become an effective director and contribute to and build successfully functioning board.

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