Fishing From the Same Pond

by | Nov 9, 2020

Individual professionals and organisations alike are influenced by who they associate with. 

Leaders will choose to hang out with people who have done what they want to do. A high-performance culture at the board-level shapes the success of industry service organisations through to listed companies. 

Of course, the flip-side holds true too. Mediocrity and negativity are contagious.

A recent research report by the firm Ownership Matters analysed a pool of 1,777 executives and 4,143 non-executives who have served on ASX 300 company boards from 2005 to now. They found a strong bias, with 38% of all board vacancies being filled with directors who have an existing ASX 300 board seat.

In short, many of the biggest listed companies in Australia are fishing for talent from the same pond.

Perhaps this is okay if the results over that period tell a good story. However, the analysis revealed that non-executive director tenure is lengthy and that board turnover during the last 15 years is largely independent of company performance!

Boards of the worst performing companies refreshed themselves only marginally faster than companies that performed the best.

If you look in any industry or business around the globe, the operating environment has changed profoundly in the past 15 years. No organisational or industry strategy has survived unscathed.

The most successful leaders and organisations move on with who they associate with. They stay ahead by nurturing new networks and relationships and by bringing high quality, skilled new people into their governance and management.

The market will keep changing at pace. How will your career, industry service organisation or company prosper if you choose to keep hanging out with the same people? Cast into some new ponds.

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