Accountability is one of the prerequisites of good corporate governance. When directors have a solid sense of accountability, they become more careful about their actions knowing that they will be held responsible for the consequences.
How can you instill accountability in your directors? Different people require different approaches, but as a general rule, these methods work:
In most companies, employees get evaluated based on their performance at the end of the year. Directors will benefit from a similar arrangement. By checking on their performance on the corporate board, you’ll be able to identify directors who are efficient and productive, and those who are not.
Just like an annual evaluation, an annual re-election process will keep directors from becoming too complacent in their roles. Knowing that they may lose their position due to bad performance at the end of the year, they’ll work hard to retain their slot on the corporate board.
The proper incentives motivate directors to do their jobs right. Some directors are paid in stocks, so they will have a personal reason for wanting the company to do well. And because they are in the position to make that happen, they will make it happen all the more when they have a financial stake in it.
Do you know other ways to increase directors’ sense of accountability? Share them with us in the comments.
Another way to increase accountability among directors is by implementing a board portal solution that also doubles as a corporate governance software, just like Convene. Our multi-platform system that runs on iPads and Android tablets makes the whole board meeting process transparent, so everyone from directors to third-party auditors will know who is responsible for each development. Even little changes in meeting documents are tracked and recorded, so no action is untraceable.