There is always much to learn when things go wrong! No doubt we will continue to gain insights into the global financial crisis and its effects, which companies were vulnerable and those which fared better, and why, for many years. Not that we would want to repeat the experience but it is has provided invaluable insights into accepted corporate governance ideas such as independence of directors.
The UK Walker Review noted that ‘independence’ has been pursued by many at the expense of getting directors from within the industry who therefore bring solid industry knowledge and that this was one of the elements lacking in the banks that failed versus those that did not.
Independence and strong industry knowledge are not an either/or on a good board. All directors need to bring independence of thought to their roles on behalf of the company. Some people are better at it than others. Some people will always need to be part of the group or aligned with the ‘top dog’.
A good board needs members who are sufficiently mature, of sufficient strength of character, to think for themselves, and it needs the sort of knowledge and experience that only comes from a life time of doing something! Look for both for your board.