Understanding the Role of Board Observers in Corporate Governance

The role of a board observer is pivotal in ensuring transparent and effective governance within organizations. This essay explores how board observers contribute to decision-making processes, maintain ethical standards, and facilitate communication among stakeholders. Drawing on insights from Ferkins & Shilbury (2015) and Pugliese et al. (2015), it discusses the dynamics of board meetings and the importance of stakeholder engagement in sport governance. The essay also highlights practical advice for future observers, emphasizing adherence to ethical standards, conflict management, and effective communication skills. By examining these elements, the paper underscores the critical contributions of board observers to organizational success.

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ORGANIZATIONAL PERFORMANCE
Name:
Institution:
Course:
Tutor:
Date:

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Introduction
In the management of every organization, there is a free will of the organization to choose to
have a board observer when it comes to its stakeholder's duties. Asen, Gurke, Solomon, Conners,
and Gumm (2011) denote that investors often request to be given the right of having their board
observers during the relevant board meetings, an aspect that is guided by the interest of the
investors. However, the observer is only required to attend the meetings but has no right of
voting on essential matters affecting the meeting or respective organization ns. Board observers
are at times excluded from portions of meetings with the aim of preserving the clients’ privilege
and confidential information. This paper is a personal reflection on a board observer case study
in the board meeting at Nossal High School. It reflects on an incident that occurred on the
Theatre of the board workshops in relation learning the importance of teamwork, a skill that I
aimed at developing as a board observer. The paper also presents a journal reflection and
concludes with a piece of advice to the students with the desire of becoming board observers.
Part One: Professional Skills Development
In every career, teamwork is a vital skill that determines the success of every professional. In
many cases, professional experience is determined by the different aspects that are displayed by
an individual such as listening, response, timeliness, effective performance, goal orientation, and
objectivity among other skills. As a result, I joined the board meeting of the school not only as an
observer but with the desire to advance my teamwork skills. According to Asen et al. (2011),
most investors often have no desire of managing the organization, participating in decision-
making or imposing their views of the startup management. However, it was my duty as an
observer to have the strong desire of gaining more experience in understanding the issues

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affecting the institution while providing assistance and support. This is to ensure I have the best
information for the investors of the institution to see if there were enough resources in addressing
decisions the management of the institution face in the daily management of the institution.
As board observers, one of the aspects we utilize in remaining relevant in a conversation to
obtaining observer and the right to information. These rights give us the chance of sitting at the
table in the board meetings and listen to the major issues affecting the performance of the
organizations as pointed out by Gautam (2005, P. 26). As a result, such opportunities facilitate
the development of positive working relationships hence enable board observers to support the
startup through their experiences and networks while ensuring that alternative strategies are
vetted and adopted as solutions to the identified challenges. Taking part in the board meeting of
the institution hence gave me the opportunity of understanding the administrative issues effective
the institution with the aim of getting updated information to keep the investors informed on the
progress of the institution.
My rights as a board observer at the board meeting that I did request gave the investors of the
institution the opportunity and right of having a representative attend the startup meeting, which
came at the beginning of the new academic year. However, I did not participate in the discussion
as my primary objective was to listen. In the process of the meeting, the discussion made me
ponder my thinking on some of the strategies that I could add to the discussion to add the value
of the plan for the institution for the 2017/2018 academic year. Tracy (2007) points out that
should an observer want to add value or have significant comments; the issues cannot be put
directly in the meeting but can only be addressed offline with the leadership after the meeting.
Nossal High School is one of the most respected institutions in Australia, and I got a good

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experience on administrative and professional management issues that are likely to affect the
performance of an organization when not addressed effectively.
In a systematic review, Fried-Oken et al. (2015) denote that there are few cases when a board
observer may request the right of participating in discussions during board meetings while there
are cases when stakeholders may request the observers to participate. Even though such rights
are not granted on specific aspects, the same study denotes that even observers can add value and
should at times be considered as there is potential value of getting alternative views in such
board meetings. In each of these cases, the board of the institution believed that my active
discussion was of a limited time horizon.
Board observation report
In their study, Ferkins and Shilbury, (2015) point out that statute often defines the rights of board
observers. In other words, there is not any common right or law enabling investors to attend or
observe the board meetings, receive board packets and information, inspect books, minutes, and
records of the board meeting or even attend the committee meetings. However, these rights, as
well as the related responsibilities of the observer, must be defined in a contract according to
Pugliese, Nicholson, and Bezemer (2015, p. 4). As a result, the desire of gaining teamwork skills
as an observer in the meeting enabled me to learn different aspects of the theatre of the board
meetings. For instance, I learned that there are many segments of board meetings where it is
considered inappropriate for us to attend. These include segments where we might have been
perceived to have or are experiencing conflicts of interest among the participants as denoted by
Pugliese, Nicholson, and Bezemer (2015, p. 2). The same study denotes that there are sessions of
board meetings involving very sensitive personal matters and aspects of strategic business issues

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are discussed. In some cases, when things do not go as expected in different organizations,
investors, creditors, corporation itself, and security holders may all seek out specific persons to
hold accountable for the failures or losses. As a result, any person associated with decision
making and management often becomes a very potential target. Confronted with such risks as
well as additional obligations or potential criminal penalties which can be imposed on the
individual, board observers need to be very careful in the process not to take part in any activity
that may compromise their duties and put their professionalism in compromising situations.
From participating in the board meeting as an observer, one of the big changes from my recent
experience is that I am in the position to take actual board seats. With the experience, I desire to
increase my teamwork skills and experience in the profession and will hence take part in more
board meetings upon agreements depending on the contract owners. The position enabled me to
understand crucial aspects of administrative issues that currently affect the management of
education institutions such as Nossal High School.
Part Two: Learning Journal and Advice to the Student
Form the 3rd weekly journal as a board observer, there are various issues I observed during the
proceedings that always begun with prayers form any member as requested by the chairman. The
previous minutes are always read and confirmed by the members. The previous AOB formed the
main agenda since it was of much importance; the agenda was the issue of the rate of the mean
grade drop in the school's performance as compared to the previous years. The Board Members
requested the principal to help them understand the underlining factors that have led to this. The
principal given a chance read the schools result and gave the analysis that indicated a drop of

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mean grade from 8.5 in 2010, 7.8 in 2011, and 6.7 in 2012. This trend was a clear show of the
gradual drop that needed to be addressed.
Explaining the main factors that included the small motivation plan which made most of the
teachers to feel that their efforts were unrecognized by the school administration and the entire
board of directors. It was stated that most of the teachers reside far from the school making them
spend a lot of time and energy when coming to school. They tend to get exhausted mostly during
the afternoon hours in addition to the unavailability of the proper meal plan. Other reason that
was indicated by the principal included a large number of students compared to the number of
the available teachers. There were various contributions from members of which most blamed
the fewer efforts put by teachers while others thought that the reasons raised by the principal
hold water. The meeting was in the argumentative mood until the chairman interceded to bring
order by calling upon the members to come up with solutions rather than hitting on one another.
A member insisted that individual performance is directly related to the overall performance of
the school, therefore.
After in-depth discussions, it was concluded that a proper plan was to be put to rejuvenate the
morale of teachers and the students who have made efforts to place the school at the better place.
Some of the motivational issues included rewarding the best performance through giving tokens
to the best students and teachers. The board members were to organize the fundraising to collect
money to oversee the construction of houses to those teachers that were residing far away from
the school and expansion of the school library. The committee members were therefore
instructed to oversee the fundraising operation through organizing a general meeting for all the
parents. The Board Chairman stated categorically that he would personally engage with the

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Teachers Service Organization to facilitate the addition of the numbers of teachers in the school
to feel the gap of inadequate teachers. Another meeting was scheduled so as for providing the
information on the proceedings on the issues that were addressed such as the agreed date of the
fundraising and a proper plan that would see that teachers are well fed during. The meeting was
adjourned with a prayer there be no other business.
Advice to the future students
To the future student who is looking forward to being a board observer, they should learn to
adhere to the highest standard of ethics that comply with the underlined rules that he will be
subject to such being a silent member who is only able to make specific contributions that add
value. A good board observer should always be firm in terms where conflicts arise but focus on
maintaining teamwork as an essential aspect that determines the success of every board meeting.
A good observer should still advise the chairman on the best way to address that conflict of
interest, for example, raising the issue with the board members to discuss the problems
appropriately. A reasonable observer must not always disclose information and in case there is
need it should be done through the consultation and consensus with the board members. To be a
reasonable observer should always strive to have access various information before every
meeting to be at par with the board members and lastly, a good observer should be well versed
with effective communication and listening skills as it will allow helping in addressing various
issues in the meeting. All these aspects can only be achieved when teamwork becomes a
foundation for the team involved.

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List of References
Asen, R, Gurke, D, Solomon, R, Conners, P, & Gumm, E 2011, '"The Research Says":
Definitions And Uses Of A Key Policy Term In Federal Law And Local School Board
Deliberations', Argumentation & Advocacy, 47, 4, pp. 195-213, Communication & Mass Media
Complete, EBSCOhost, viewed 25 October 2017.
Ferkins, L, & Shilbury, D 2015, 'The Stakeholder Dilemma in Sport Governance: Toward the
Notion of "Stakeowner"', Journal Of Sport Management, 29, 1, pp. 93-108, SPORTDiscus with
Full Text, EBSCOhost, viewed 25 October 2017.
Fried-Oken, M, Daniels, D, Ettinger, O, Mooney, A, Noethe, G, & Rowland, C 2015, 'What's on
Your Mind? Conversation Topics Chosen by People With Degenerative Cognitive-Linguistic
Disorders for Communication Boards', American Journal Of Speech-Language Pathology, 24, 2,
pp. 272-280, Education Full Text (H.W. Wilson), EBSCOhost, viewed 25 October 2017.
Gautam, K 2005, 'Transforming Hospital Board Meetings: Guidelines for Comprehensive
Change', Hospital Topics, 83, 3, pp. 25-31, Business Source Premier, EBSCOhost, viewed 25
October 2017
'John Wiley & Sons Inc Annual Shareholders Meeting - Final' n.d., Fair Disclosure Wire
(Quarterly Earnings Reports), Regional Business News, EBSCOhost, viewed 25 October 2017.
Pugliese, A, Nicholson, G, & Bezemer, P 2015, 'An Observational Analysis of the Impact of
Board Dynamics and Directors' Participation on Perceived Board Effectiveness', British Journal
Of Management, 26, 1, pp. 1-25, Business Source Premier, EBSCOhost, viewed 25 October
2017.