Director Selection is all too Amateur

The Australian, 21 March 1994

What does it take to make a good chief executive? And what to make a good chairman or a good executive director? What about non executives?

These seem pretty basic questions yet they are ones which companies rarely ask themselves. There are few signs that boards take any notice.

A recent United Kingdom Institute of Directors and Henley Management College survey tried to answer the questions in a way which will be of practical use.

A list of 29 qualities deemed essential in boardrooms of companies from the biggest to the smallest, was drawn up. Each different role on the board was considered and allocated specific qualities.

The director of Horsley & Company management consultants, Andrew Horsley thought the report made suggestions as incremental to other processes already in place.

I think it's a naive list, there are one or two good organisations at the moment where you get very good directors - you can discard all this nonsense, this 29 point list - that are active contributors who have the organisational interests as their own high personal priorities".

He cited a number of self regulating effects including peer assessment within and without the board, shareholder pressure, the overall performance of the business, media prompting and general management feedback but admitted that having criteria was fundamental.

"It doesn't just happen by osmosis and by the old boys network…..you have got to get out there and actively look for those sorts of directors and hold up performance criteria against them" he said.

Horsley found the list impractical and pointed to the difficulties in assessing or cultivating qualities that had a lot to do with character rather than training or application.

He also saw board behaviour as more transparent than it once was with self analysis, avoidance of complacency and scrutiny as important components of any board's makeup."