As Peter Drucker said, “culture eats strategy for lunch.” This is true in the best boardrooms as well.
Three years ago, we identified a group we call Gold Medal Boards; those where directors rate their board’s effectiveness highly (9 or 10 on a 1–10-point scale) and where the company has outperformed relevant TSR benchmarks for at least the last two consecutive years. If you were to step into a Gold Medal Boardroom, you would quickly notice a difference in the way directors behave, conduct themselves, and go about their work.
In fact, on every single one of the 28 measures of culture and behavior we reviewed, Gold Medal Board directors outperform their peers—sometimes by significant levels. Let’s take a look:
I had the pleasure of assisting Rusty O’Kelley, Rich Fields, and Laura Sanderson with this article, which was published by the Harvard Law School Forum on Corporate Governance.