Lazy, Rubber-Stamp, Overbearing, or Collaborative? What Kind of Board Does Your Company Have?

What kind of board truly helps a company succeed? Below are four different types of boards – can you recognize your own among them?

1. The Lazy Board

A lazy board exists only because the law requires it. If the board ever meets, its members merely nod in agreement without offering real criticism or new perspectives.

The board stays in the background and doesn’t bring significant added value. When a lazy board is paired with a passive CEO, it means missed opportunities and a lack of innovation for the company.

1. The Rubber-Stamp Board

As the name suggests, a rubber-stamp board simply endorses the CEO’s decisions without question. The CEO may be the company’s majority owner, with the power to dismiss the board at will. The members of this type of board let the CEO take charge of leadership and don't challenge the status quo.

Real power resides with the CEO, leaving the board without genuine influence. This approach makes the company only as strong as its CEO and lacking in diverse and strategic insights that could elevate it to the next level.

1. The Overbearing Board

At the other extreme is the overbearing board, which wants to keep all the control and doesn’t hesitate to step on the CEO’s toes, often making decisions that should be left to the CEO. This board might include a former CEO of the company who hasn’t learned to let go of their previous role.

An overly dominant board creates tensions and prevents the CEO from leading the company in the way they see best. Strict control can easily stifle creativity and innovation, potentially slowing down the company's growth.

1. The Collaborative Board

The collaborative board is the ideal form of governance. The board acts as an active partner to the CEO and the operational management, asking constructive questions and daring to challenge the company’s plans by providing new perspectives. This type of board is committed to shared goals and boldly makes decisions that promote the company’s success.

When the board focuses on strategic matters and the CEO handles operational tasks, a balanced and effective collaboration is created, adding real value to the business.

What Kind of Board is the Key to Success?

What kind of board does your company have? Is your board a creator of value, or perhaps a source of conflict? Is it a partner that helps achieve goals, or is it time to consider a change? What kind of board do you want?

This text was published in the Finnish language in Kauppalehti on 11 September 2024.