By Lisa Hochgraf
A recent report from the Filene Research Institute identifies four common types of corporate boards. Citing research from Ulrich Steger and Wolfgang Amann, authors of Corporate Governance: How to Add Value, Filene's Boards and Leadership: How Boards Can Add More Value suggests that the very best boards are "challenger" boards, which not only do a great job of overseeing an enterprise, but also challenge the organization's managers to do great things.
Which type of board does your credit union have? Here's more detail on the three other common types, excerpted from the Filene report.
The "watchdog" board is now required by the Sarbanes-Oxley Act of 2002 and some institutional investors. It predominantly examines financial figures on past performance.
The "VIP" board is often dominated by prestigious individuals who have little intention of looking at the nitty-gritty of the business. Steger and Amann cite as an example the board of Hollinger International, where Henry Kissinger—former U.S. Secretary of State—served next to other, mostly retired but still for all intents, senior government officials.
The "scout" board is most often found in private companies, where boards alert management to new trends, cutting-edge business, and product ideas, and push management to avoid complacency.
Ideal boards, aka "challenger" boards with high involvement both in advice/coaching and monitoring/controlling, are rare, according to the researchers.
Be the best board you can be!
Lisa Hochgraf is a CUES editor.
Ben Rogers of Filene will discuss this research in much more depth during his presentation at CUES' Execu/Summit, slated for March 4-9 in Steamboat Springs, Colo.
