DISASTER IN THE BOARDROOM

SIX DYSFUNCTIONS EVERYONE SHOULD UNDERSTAND

Why when companies come crashing down, do we hear of boards who have failed in their fiduciary duties? Or that they have been ignorant, complacent or downright complicit in these scandals and downfalls?

Disaster in the Boardroom shows how boards can be better. Looking at why these scandals happen, my co-author and I, present in-depth case studies of major global corporations – including recent contemporary scandals associated with companies such as BP, Facebook and Uber – to reveal their particularities but also how they can be overcome.

We explore common attributes of scandals such as lack of independence from management, missing key voices, cultural amplification, diffusion of responsibility, rule-bound cultures and groupthink. And we identify ways to strengthen boards, improve their culture and competence, and give directors and others the power to take action and ultimately prevent disasters from happening.

Our book is essential reading for every executive in every boardroom, those aspiring to board positions as well as anyone interested in why boards fail. It has never been more important to pre-identify and eradicate these boardroom dysfunctions – not least so that their impacts upon society can be better seen, understood, mitigated, and avoided.

Disaster in the Boardroom is now available from any good bookseller. Read a review of the book by the Institute of Directors.

“Finally there is a business book on the market that is a practical, thought-provoking and useful read for existing and aspiring board directors and executives. Better still, Disaster in the Boardroom identifies six types of board failing that should become the essential metrics by which anyone who wishes to accurately judge any business anywhere in the world needs to understand and use. There is little doubt that every business needs to be assessed to see if they exhibit or fall into one of the six types of failing boards the authors Brown and Peterson so persuasively identify.”

John Allan
Chairman Tesco and former President of the CBI.

“In Disaster in the Boardroom Peterson and Brown go beyond standard narratives on board performance to offer evidence-based insights on the drivers of behaviour on boards, and of the individuals who serve on them. Using real-life case studies, they provide illuminating examples of how such dynamics manifest, the impact that they can have, and offer practical suggestions on how to increase board effectiveness. This book is a must-read for board members, Chairs, charity trustees, board evaluators, aspiring board members and all stakeholders who engage with boards.”

Vyla Rollins
Executive Director, London Business School, Leadership Institute

“Gerry Brown and Randall S. Peterson take us on a well-argued, fair-minded and very readable journey of corporate corruption, greed, crass mistakes and misjudgments. Corporate Governance is failing too often. Usually via fraud, bribery, industrial accidents and deaths, sexual harassment, tax evasion and gross mis-selling amongst other boardroom blunders. The authors not only eloquently describe and investigate these scandals but are just as analytical, considered and detailed in their proposals to rectify them. One of the solutions to these various corporate governance problems is better trained, more diverse, powerful and plentiful Independent Directors. The book is essential reading not only for new directors but also for existing directors, many of whom – on this evidence – need to substantially raise their game.”

Barry Bateman
Former CEO and Vice-Chair of Fidelity International

“There have been many corporate scandals and collapses over the last few decades. This book not only summarises them in an interesting manner but also places them into an historical context and demonstrates that very little has changed! Despite the apparent advance of technology and governance principles, there remains an almost unlimited capacity for boards to get things wrong. Of course, the common thread across the historical scope of this book is human beings – whose behaviour the authors analyse and explain in a compelling manner. With case studies on Facebook, Google and Uber amongst others, authors Brown and Peterson also provide possible solutions and best practices. The book is a really good read! It takes in the drama of real business situations and places them within a useful and insightful framework of explanation. It’s a real pager turner – a rare achievement in a non-fiction volume!”

Dr. Roger Barker
Director of Policy and Corporate Governance, Institute of Directors

“Disaster in the Boardroom highlights why and how things have gone wrong in boardrooms across the corporate world. The authors provide thoughtful analyses and many great insights into how to ensure boards develop and provide the right balance of support, challenge and oversight. Disaster in the Boardroom shines a light on the many ways boards can use the lessons of the past and present, to predict and avoid executive suite scandals and corporate governance missteps in the future.”

Dame Inga Beale
Portfolio Director

“Disaster in the Boardroom is a fascinating must-read about boards, their long history, responsibilities, critical skills and high profile inadequacies. Through careful presentation and stimulating examples, this superlative book shows how necessary it is to be constantly diligent so as to maintain institutional integrity, cultural excellence and long-term competitive edge. Authors Brown and Peterson’s research finds six carefully constructed dangers that we should all think about discuss and apply. Balanced navigation across independence, management and technology in today’s fast-changing world will demand more skills, wisdom and courage from boards. A thorough reading of the book bridges gaps for those with experience and also provides an important framework for executive managers, aspiring board members, professionals, other advisors and students alike to understand more fully the critical role of oversight and governance. I recommend this book wholeheartedly.”

Sir Dennis Gillings, CBE, FMedSci
Chairman and CEO, GF Management

“This powerful book fuses story-telling with rigorous research to present a highly readable, compelling analysis of corporate boards’ influence―and failures. The juicy examples and case studies, ranging across time and around the globe, paint a picture of what goes wrong, why the different types of board dysfunction arise, and why we should all care. This important book should (!) appeal to a wide variety of readers well beyond the boards themselves― taxpayers, managers, lawyers, investors and ordinary citizens whom all have a stake in how boards perform. Perhaps, most importantly, Brown and Peterson bring together their unique strengths and experiences to outline practical strategies and tactics to strengthen board effectiveness. Disaster in the Boardroom is fascinating, well-researched, and more important read than ever.”

Heidi K. Gardner
Distinguished Fellow, Harvard Law School & author of Smart Collaboration

“Boards continue to let us down. Brown and Peterson carefully and comprehensively tell us why but also what can be done about it. They diagnose and document an array of scandals and board pathologies―ranging from the subordinated board to the bureaucratic board―to learn valuable lessons as well as present a compelling case for a concerted emphasis on board culture, complete with many highly tangible recommendations. Anyone reading Disaster in the Boardroom: Six Dysfunctions Everyone Should Understand – whether you’re a director, company stakeholder or casual reader – will greatly benefit from this engaging, thoughtful and timely book.”

Donald C. Hambrick
The Evan Pugh University Professor & Smeal Chaired Professor of Management at Penn State University

“Brown and Peterson outline the six dysfunctions preventing boards from doing their jobs. They can be distended, subordinated, imbalanced, bystanders, bureaucratic or conforming. Each dysfunction is explained, explored and then illustrated in what amounts to some splendid storytelling. I read this section – and then I went back and reread it because it’s so good. The companies used for illustrative purposes aren’t anonymous entities: they’re big corporations and names are named. I’m not going to give quotes: you really should read the book to get the full impact. I can promise you won’t regret it, particularly if you really want to know what went on at Facebook, Google, Carillion, Uber, BP and RBS. Should the auditors have been more proactive? Well, you can read about The Big Four, too.”

The Bookbag

“Disaster in the Boardroom is an exceptionally well-written, authoritative and impressively accessible book which addresses key questions in corporate governance. How can we make boards more accountable to their stakeholders? How can we avoid disasters which happen under the watch of the board? How do we train board members to be more vigilant? Gerry Brown and Randall Peterson do a wonderful job in specifying the six dysfunctions of a board as well as identify over seventy board failures in this evidence-based and highly insightful book. Disaster in the Boardroom is a must-read for all board chairs, non-executive directors, financial journalists, policymakers and students of governance.”

Patrick C. Flood
Professor of Organisational Behaviour, Dublin City University Business School.

DR RANDALL S PETERSON

SIX DYSFUNCTIONS EVERYONE SHOULD UNDERSTAND