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to perform it to the full. Directors need to acknowledge that the board has a duty to oversee the organisation's success. It must also supervise risks that are important for the organisation and impact employees and their families, customers, and society as a whole, often into the next generation.

      Accountability is another key value. Board members must be prepared to explain and justify decisions that have been taken, and to be answerable to the company's stakeholders. Being a board director also requires moral authority – the adherence to a set of principles founded on a correct course of action.

Illustration listing out the primary values, director's behaviours, and unacceptable behaviours for reinforcing board culture.

      Nonetheless, all directors need to successfully fulfil their two mandates: the duty of care, whereby they undertake their role and responsibility with care, diligence, judgement, and skill; and the duty of loyalty, or putting the interests of the company and its shareholders ahead of their own. Board members therefore need a combination of core attributes, including relevant skills and competence, a detailed knowledge of their legal responsibilities, and dedication and focus.

      Good judgement is essential for directors to fulfil their duty of care. When this is lacking, the quality of decision-making suffers. Judgement comes from knowledge and intuition, both of which can be improved.

      First, individuals must have the necessary knowledge – acquired through education and experience – to make good, considered decisions. Education gives us the technical knowledge to understand complex problems. Curiosity helps individuals to complement their formal education and continue learning, thereby enabling access to a memory bank of information and details that may be relevant to the present.

      People also use their individual experiences to draw lessons from the past and apply them to the future, in an integrative process. In some situations, either weak signals or true shocks may prompt us to realise that our knowledge is insufficient, and that we require additional input to evaluate situations effectively.

      Specifically, a board member develops an integrative view – in terms of the executive world, he or she may generally put a premium on analysis, when in fact it is synthesis that is badly needed in many contexts. Because a board needs to address many stakeholders toward the long term and the next generation, a certain skill in deriving the essential from many pieces of information is key to board quality.

Illustration depicting the roots of good judgement: mapping one’s strengths and weaknesses, an interplay between internal variables and external factors.

      Good judgement is especially important today, as boards face increasing external pressures and may have to deal with crises that challenge their decision-making skills. We will discuss crisis management in more detail in Chapter 12.

      Conflicts of interest are rampant in today's world. They arise when directors lose impartiality because of either material interest or a conflict of roles. When directors are in a position that may benefit them, or someone close to them, in any way, then they can no longer make impartial decisions; this is a material conflict of interest. A conflict may also result from one director having different roles, so that their obligations to one company are compromised by those to another. Directors who sit on multiple boards may therefore have a potential conflict if two of these organisations form any kind of relationship.

      Another source of conflict is self-interest. When directors focus primarily on maintaining their position, comfort, and income rather than on what is best for the company, they are likely to be highly biased. They may also become compliant and not wish to be unpopular. Again, they lose their impartiality.

      Sometimes directors fail to acknowledge conflicts of interest – even to themselves. It is critical that directors think about this honestly, because it has a direct impact on board service. All of us are conflicted, and figuring out these conflicts is part of our duty. We explore the four tiers of conflicts of interest facing boards in Chapter 13. A good rule of thumb is for board members to have a list of their own conflicts of interest: time, money, effort, friends, relationships, financial interests, reputation, social network, and more.

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