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Understanding and measuring the value of a board
It is reasonable to assume that good organizational performance is the result of a board doing its job well. However, this seemingly obvious statement is not as simple as it first might appear.
Boards often assume that they are effective if the organization that they govern is successful. However, this causal link does not always follow. Organizational success might be the product of favourable market or funding conditions, a high performing and dominant CEO and executive, and/or an established brand or reputation that attracts a highly motivated and talented workforce. Boards should not, therefore, assume that just because their organization is successful, that there are no other contributing factors to this success.The reverse can also be true. That is, we cannot assume that poor organizational performance is necessarily the result of an ineffective board.