Thin on Top

About the Author

Bob Garratt is an esteemed authority in the field of corporate governance and board performance. As the Chairman of the board of Board Performance, a consultancy specializing in director development and strategic thinking, Garratt has dedicated his career to improving the effectiveness of corporate boards worldwide. With a wealth of experience and a profound understanding of the intricacies of board dynamics, Garratt brings a unique perspective to the challenges and opportunities faced by modern corporate boards.

His expertise is reflected in his numerous publications and his influential role in shaping corporate governance practices. In Thin on Top, Garratt distills decades of knowledge and insights into a comprehensive guide aimed at elevating the standards of board performance and corporate governance.

Main Idea

In Thin on Top, Bob Garratt addresses the critical need for improved corporate governance and board performance. He highlights the pervasive issues plaguing modern boards, such as ignorance, incompetence, and greed, and offers practical solutions to transform these boards into effective, strategic entities. The book dispels common myths about corporate governance, outlines the fundamental duties of directors, and provides a roadmap for developing competent and ethical board members. Garratt emphasizes the importance of continuous learning, rigorous evaluation, and a clear understanding of the distinct roles of management and direction in achieving sustainable corporate success.

Table of Contents

1. The Future of Corporate Boards
2. The Crisis of Corporate Governance
3. Back to Basics: Reasserting the Superiority of the Board
4. The Ten Directorial Duties: Back to Basics
5. Why Boards Fail: Power and Corruption on the Board
6. Directorial Dashboards: The New Board Metrics
7. Developing the Learning Board
8. Professionalizing the Board

Analyzing and Explaining Key Ideas

The Future of Corporate Boards

The first chapter delves into the essential differences between managing and directing an organization. Garratt argues that most of today's corporate board directors are essentially glorified managers, lacking the strategic oversight necessary for effective governance. He identifies a crisis in corporate governance, driven by a mixture of ignorance, strategic incompetence, and greed. To resolve this crisis, Garratt advocates for the systematic induction, training, and evaluation of directors as true professionals.

"Unless a systematic upgrading of directorial competence and board performance takes place, our corporate and economic systems will sharply decline." - Bob Garratt

Garratt stresses that without understanding the roles and responsibilities of corporate boards, public confidence in corporations will continue to wane. The solution lies in installing a system for selecting, training, developing, evaluating, and regulating board directors. Experience alone is not sufficient; distinct directorial skills are crucial for board effectiveness.

The Crisis of Corporate Governance

In this chapter, Garratt defines corporate governance as the activities, processes, and values that must respond to the changing demands of shareholders and stakeholders. He critiques the disconnect between shareholder and stakeholder demands, and the inappropriate reward systems for executives that have emerged. The over-praise of "celebrity chief executives" has overshadowed the fundamental purpose of companies.

"We must reaffirm and rigorously apply rules on the roles, tasks, duties, and liabilities of boards of directors." - Bob Garratt

Garratt debunks three major myths of corporate governance: the myth of the all-powerful chief executive, the myth that a director's primary duty is to the shareholders, and the myth of executive and non-executive/independent directors. He argues that boards must act as a group of equals, driving the enterprise forward while maintaining control.

Back to Basics: Reasserting the Superiority of the Board

Garratt emphasizes that misunderstanding the roles and tasks of the CEO and the board leads to underperformance. He clarifies that a chief executive is not a full member of the board but reports to it, and the board's role is to give direction and control. The assumption that CEOs own the corporation is incorrect and harmful.

"A true chief executive reports to a board, debates with it, takes instructions from it, but is not a voting part of it." - Bob Garratt

He outlines the reasons why boards fail to control powerful CEOs, including directors' lack of knowledge about their roles and the public's misperception of the CEO's importance. Garratt calls for educating shareholders and the public about the true roles of boards and the necessity of enhancing the board director's role.