Network Governance: Sharing the load of decision making

1 October 2008

Can a single board of directors, informed by a single CEO effectively manage a corporation and avoid ethical risks?  According to Dr. Shann Trunbull, a Principal and the International Center for Self Governance in Australia, the answer is no.  Firstly, with only one board and with only one source of information, the board is both overloaded with information and poorly informed – despite the best efforts of the CEO – leading to a situation where decision making is fraught with risk.  In addition, the single line of oversight can lead to conflicts of interest that are incredibly hard to resolve without a separation of operations and oversight.

Dr. Turnbull suggests changes to the governance structures that will enforce this separation by creating multiple boards and ensuring multiple sources of information feeding into the boards as well as the CEO.  The different boards would have various roles aimed at the decomposition of decision making labour, the reduction in information overload, increased quality of decisions, and a reduction in conflicts.

The governance model is not that different from the model being used by several open source communities.

His full paper can be downloaded here.  All his papers can be found here.

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