In our experience, boards are effective to different degrees in all these three areas. Compliance tends to be the main focus, for obvious reasons, then priority is placed on best practice. However, behaviour is the one which makes the different between a transactional board and a transformational one. Sadly, this is the area which is often ignored until the issues become perennial.
In the 13 years since Sarbanes-Oxley launched the new world of governance, significant progress has been made on two fronts: understanding and applying new laws (compliance) and defining and advocating pathways to effectiveness (best practices). However, expertise in compliance and best practices won’t solve issues like distrust between directors, waning competence, or insufficient CEO response to board feedback. Such boardroom challenges require a different specialized skill.Consider the following model:The triangle defines the territory of board effectiveness, with each of its three points representing essential expertise. If specialists in compliance or best practices are seasoned, they might well be able to identify behavioral issues. But when unusual or difficult behavioral problems occur, specialists with behavioral science training are needed to diagnose problems and their underlying causes and to help solve them in a sustainable way