Home' Trinidad and Tobago Guardian : April 20th 2014 Contents APRIL 20 • 2014 www.guardian.co.tt SUNDAY BUSINESS GUARDIAN
ABOUT BOOKS | SBG 21
In Boards That Lead, authors Ram Charan, Dennis
Carey and Michael Useem argue that boards today
have a duty to lead; to take a more active role in
making decisions that were once perhaps the sole
prerogative of the executive.
The reason for the increased active leadership role of
boards is the growing complexity and information overload
of today s business environment "across every facet of doing
business," the authors write. They stress, however, that their
new model of board leadership is based on a collaborative
partnership in which the boards know "when to lead, when
to partner, and when to stay out of the way."
Knowing when to do what
Perhaps the most important leadership responsibility of
the board is to develop the central idea of the company: the
practical, guiding core concept of the company that "ref-
erences why the company exists, whom it serves, how it
should be nurtured, why it will flourish, how it will make
money and manage risk, and where it must be going if it
is to sustain a competitive presence and achieve its broader
purpose," the authors write.
"The central idea is the bedrock on which the enterprise
is raised and how its resources are spent."
Boards should also take a leadership role in selecting the
CEO; ensuring the board s competence, architecture and
modus operandi; ensuring the ethics and integrity of the
company; and defining the company s compensation.
Boards should partner with the company s executive on
strategy, capital allocation and execution; defining the com-
pany s financial goals; managing risk; allocating resources;
developing talent; and developing what the authors call a
"culture of decisiveness."
Finally, according to the authors, boards should stay out
of the way for issues of execution and operations as well
as non-strategic decisions.
The Apple example
The productive collaboration between Steve Jobs and the
chairman of the Apple Board Edgar S Woolard, Jr, according
to the authors, perfectly exemplifies the meaning of knowing
when to lead, partner and stay out of the way.
To begin with, it was Woolard who convinced the board
to bring Jobs, forced from Apple in 1985, back to the company
in 1997 (one of the authors, Ram Charan, was an adviser
to Woolard during this period). Jobs agreed on the condition
that Woolard replace the entire board, although eventually
one other board member was allowed to stay.
With a new board in place and Jobs committed to reviving
the fast-declining company, Jobs and Woolard, according
to the authors, began a back-and-forth process in which
Jobs would come to Woolard with an idea, which Woolard
and the board would either approve or disapprove.
Jobs, Woolard would say, was always respectful, making
a passionate pitch for his ideas but accepting defeat if it
In many cases, however, Jobs was able to sell Woolard on
For example, after taking his new leadership position, the
authors write, Jobs convinced Woolard to let him stop the
Mac clones (an expensive proposition since the clone makers
were under contract), fire many of the firm s engineers,
divide the survivors into six teams with whom Jobs would
meet once a week, and perhaps most memorably, create an
Apple store. Woolard resisted the Apple store, knowing that
other computer manufacturers had tried and failed to succeed
in retail. He finally acquiesced to only four stores, which
the board approved.
Boards That Lead is an owner s manual, clearly laying out
how boards are supposed to operate.
The book begins with defining the central idea and recruit-
ing the right board members, then moves to several chapters
on managing CEO succession (including identifying failing
CEOs and recruiting successful replacements), and finally
covers managing risk and avoiding micro-management.
All chapters end with a detailed "director s checklist" to
help achieve the responsibilities outlined in the chapter.
In an early chapter, the authors write that board leadership
"does not mean wandering into the weeds---micromanage-
ment is decidedly not the point---but laissez-faire is no
longer an acceptable posture at many boards either." This
clearly organised and authoritative book will help boards of
directors stay as actively involved as they need to be---and
Boards That Lead
When to take charge, when to partner
and when to stay out of the way
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