Directors' dialogue may need a reboot: we can't assume that the way we converse in the boardroom is as good as it gets.

• Author: Kipp, Michael F.
• Position: BOARD PERFORMANCE

IT WOULD BE COMFORTING to believe we've learned something from post-Enron responses to failures in governance, but meltdowns persist and sabers rattle for yet another round of reform: vilification, education, certification, and regulation.

It's easy to forget that, at base, the board has a very circumscribed job:

-- To resolve questions of identity and direction;

-- To secure and support leadership;

-- To monitor performance;

-- To manage risks; and

-- To ensure compliance.

Questions of identity and direction are the key-stone in this framework. Even the most subtle shifts have a way of changing everything else: what leadership is called for, what constitutes success, what risks are to be managed, and what regulatory requirements must be met. And while formal strategy sessions are infrequent and often unproductive, questions of identity and direction come up all the time. They make their appearance in those defining moments that set the stage for adding value or eroding trust and worth, sometimes irreparably. (For instance, "I think we'd be making a mistake to pass on the opportunity to become a player in this sub-prime market.")

If dealing with them called for a simple up or down vote or a choice between clear alternatives, it would be easy. Real decision making, though, is formulating options and uncovering their implications. For that, the board must have taken time to build a collective understanding. The quality of that building process will drive not only the outcome but determine the effectiveness of the board and the viability of the enterprise.

Aside from having well-informed participants and prudent regulations, there are three critical preconditions: A philosophy that the board and CEO are a team; a set of common tools for talking, and leadership.

Teamwork

At first blush, the idea of boards as teams strains credibility. Members represent diverse backgrounds, agendas, skills, and stakeholders. Even with years of tenure, they may know one another only superficially, spending time in each other's company for a few hours a year in relatively formal settings. What's more, people are uncomfortable differentiating in peer groups, their discomfort rising in direct proportion to the stakes they perceive. To expect that such episodic tablemates will surface the courage to stand alone or shoulder to shoulder in Tiananmen Square is fantasy, right?

Peter Drucker long ago counseled that you don't build a team by fixing relationships or...