How to Increase Accountability and Transparency in the Boardroom

boardroom accountability and transparency

Sometimes, working on a board of directors can give people an inflated sense of entitlement.

In the television hit, Mad Men, Big Boss Roger Sterling says how “being the guy with his name on the door makes you feel like you can get away with everything.”

This statement came after he acted untowardly towards the main character, Don Draper’s wife, Betty.

Of course, not every board member has their name on the door. But the same principle applies. Directors possess the swagger of people “who own the place,” so to speak.

With that precedent comes the feeling of being untouchable. It’s easy to get caught up in the rush of being a highly ranked member of an organization.

Sometimes this lack of accountability manifests itself in behavioral misconduct. Other times it makes itself apparent through a lack of effort.

Though, in increasingly transparent and socially conscious times, it’s more important than ever for board members to be accountable for their actions.

Acting for the Good of the Organization

Behavior is often influenced by consequences.

While this is behavior science, it’s not exactly rocket science. Think about children—successful parents apply the appropriate consequence for any given misbehavior.

What happens if parents fail to do so? Generally, their children turn into tyrants and eventually become “the teacher’s problem.”

Also, it teaches people that their actions won’t be either rewarded or sanctioned and that they may as well just act in their own self-interest.

When board members aren’t checked for any misgivings, it teaches them to focus less on the greater good and more on personal gains when it comes to board governance.

Conversely, when boards are focused on making members earn their position, it’s seen as an honor to serve as a member. Conducting one’s self with the interest of the organization at the forefront encourages dignified conduct and behavior.

In ensuring that board members care about their reputation and perception of their skill set, they’ll work hard to avoid sanctions and impact the board positively.

The boards of directors at various commercial banks tell the members what percentage of board meetings each director has attended throughout the past year. Examiners investigate the board numbers, and all directors are subject to stiff sanctions when they underperform as a member.

Say It and Never Stray from It

Expectations must be explicitly outlined for board members.

Otherwise, these guidelines will remain too abstract and open for interpretation.

This isn’t meant as some kind of indictment on members. It’s just human nature to act out of whack without clearly designated boundaries. Board members must be well aware of parameters, benchmarks, criteria, and whatever other performance metrics to which they’ll be subjected.

Only leaving everyone to their own devices and expecting the best result is a touch naïve. Seeing is believing. Expecting everyone to be on the same page when there isn’t even a book is a big ask.

Boardroom Accountability and Transparency Starts from Each Member Looking Inward

Of course, it’s fantastic for the board itself to implement accountability initiatives. However, the only way all members will act in the interest of effective governance is by always remaining vigilant in assessing their own actions.

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