What makes for a happy board of directors? This was the question posed to panellists at a conference on the challenges that directors faced.
From the perspective of independent non-executive directors, who are members of a company's board of directors not involved in running the business, the answer was often elusive, said Eric Li Ka-cheung, the former accounting sector legislator.
Mr Li, who sits on the board of Sun Hung Kai Properties, Kowloon Motor Bus and Hang Seng Bank, told delegates that executive directors and their non-executive counterparts must recognise that they were playing for the same team. It was important that they recognised they possessed more common goals than differences, and that rivals existed in the marketplace outside the company and not within the boardroom.
He said that it was important for non-executive directors to understand the company's business to be in a better position to give advice, but they also needed to strike a balance by not asserting their own solutions and management views. A non-executive director's role was to add value to broaden a board's perspective and increase the depth of decisions, and not to replace management.
From senior management's point of view, he said meetings should contain an interesting agenda with questions for advice, rather than just going through the formalities. Senior managers should also not hesitate to call on non-executive directors for advice outside board meetings. They should also try to share their challenges with their non-executive colleagues.
Alexander Hamilton, who sits on the board of directors of companies such as Citic Pacific, China Cosco Holdings and Esprit Holdings, said: 'A happy board is one where the executive members show that they appreciate their non-executive colleagues, respect their experience and expertise, and regard them as part of the team to direct the company.'