Stress testing the board governance policy

Tips for implementing board conflict management strategies

In my last column, “Preparing for Conflict in the Boardroom,” I identified three strategies to help general counsel prepare the board and management to address board conflicts in an organized, effective manner. But how, in the real world, would general counsel implement those strategies? This and subsequent columns will attempt to give practical tips to counsel.

The first strategy is to create an annual board interactive exercise putting the board governance policy to the test using several different crisis scenarios. This “stress testing” strategy is a way to proactively change the annual process of reviewing the board governance policy into a more proactive board exercise. The reason? Actually stress testing policies rather than merely discussing revisions to policies yields very different results, including valuable collective education of the board. Asking the board to engage in exercises to “stress test” their governance policy will help better prepare directors for contingencies and conflicts.

Christine A. Edwards

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