Board Advisory

We assist our clients to attract, assess and place non–executive directors in both public and private sector institutions.

Building a strong board

The boards of both public and private entities require oversight and ensuring the mandate of shareholders is executed responsibly. They must ensure proper management of risk for the organisation by creating strategies that will take the company to greater heights. They must have the ability to hold the executive accountable for the execution of these strategies.

Our Board Advisory service helps boards to rate themselves against their peers and to transform based on a proven methodology to improve their effectiveness. “Research proves that better quality boards are positively correlated with superior returns over one, three, five and seven years” – Board Barometer™ June 2009. a unique methodology that profiles the makeup and behaviour of boards, and allow shareholders to constructively, proactively and objectively improve their quality and the effectiveness.

In order to validate the rigour of Board Barometer™, we conducted tests to establish whether an ALSI 40 index weighted by Board Barometer™ scores instead of market capitalisation, would outperform the original index.  The results were astounding!  The Board Barometer™ – linked index outperformed the ALSI 40 over one, three, five and seven years – through good times and bad.

These results suggest a reversal of the conventional risk/return rule when it comes to board composition and quality.  Well-constructed, lower-risk boards seem to deliver sustainably higher returns for their stakeholders.

Board Barometer
Source: Brian Khumalo (2009)

Our understanding of the key challenges facing our clients

  • As with members of executive teams, boards need to raise their levels of instinct and intuition in order to succeed in a 21st century corporate world
  • There is no framework to objectively benchmark board composition and behaviour
  • Companies need a robust methodology that they can use to optimist the design and architecture of their boards
  • The board renewal process requires a scientific mechanism for establishing the profiles of ideal candidates to be targeted for appointment
  • There is a need to not only establish essential board committees, but also to ensure proper resourcing of committees with appropriate expertise and skills
  • Stakeholders need to monitor and track the behaviour an attitude of boards with respect to regulatory and legislative requirements
  • There is a lack of assessment of the integrity of reporting and disclosure in accordance with corporate governance codes and listing requirements
  • Ultimately, stakeholders need a early warning system that ensure a balance between high returns and sustainability
  • Given that the executive team is capable of creating competitive advantage through their leadership approach, there is need to ensure that the board is strong enough to be constructively critical, and to hold them to account

Benefits of using the Board Barometer CM

  • We provide an in-depth and independent benchmark for board construction and behaviour
  • The Board Barometer CM methodology positively correlates boards that score well to the levels of value creation of their underlying companies
  • The Board Barometer CM provides a scientific mechanism for board design or renewal
  • We help to reduce risk and increase returns in companies through creating better boards
  • Our Board Advisory service will help to create boards that are more adaptable to change – the cornerstone of competitive advantage in the 21st century.