CHICAGO, Dec. 18, 2013 /PRNewswire/ -- Is there a widening information gap between your executive suite and your board? If so, you are dealing with information asymmetry. This gap poses a significant risk to boardroom operations and can lead to a corporate crisis.
In Mitigating Board Information Risk, co-authored by McGladrey and the National Association of Corporate Directors (NACD), board members and C-suite executives share the challenges they face in getting the right information and how they overcome them.
Mitigating Board Information Risk covers the six warnings signs of board information risk:
1. Significantly increased time commitment: Boards face increased demands around issues such as regulation, globalization and technology. Are you ensuring your board still has the time it needs to analyze vital information on all issues?
2. Information overload: Is management sending too much data to the board, burying critical issues in unnecessary detail and adding to the board's workload?
3. Management's negative perception of the board: There should be natural, healthy tension between C-suite and the board. Has tension grown to the point where management is trying to control the board by filtering information?
4. Poor culture: Is management afraid to report unfavorable information to your board? Your corporate culture must allow management to report less-than-positive information without fear of retribution to encourage the timely flow of objective data so that negative situations do not escalate.
5. Lack of necessary expertise on the board: Getting the right information to your board doesn't help if they don't understand it. Does your board consist of directors with the skills and knowledge necessary to interpret and ask the right questions about the information it receives?
6. Poor relationship between CEO and board chair: Again, healthy tension is natural, but an open relationship is vital. Do your CEO and chair maintain open, frank communications about issues, risks and strategies?
From board composition to board management to board processes, Mitigating Board Information Risks addresses how to help ensure your board has the right information it needs to do its job.