When organizations discover the existence of the psychology of entitlement, it is frightening because it destroys motivation and performance. It will eradicate an earnings mindset and supplant a meritocracy. That same psychology of entitlement has infected too many boards. Without external accountability, some directors believed that when they had attained the level of power and influence needed to be elected to certain boards that they had “graduated” from “performance appraisals”, and it meant they did not have to answer to anyone. As a result of the “high-profile” scandals of the last few years and many outraged shareholders, that mindset was exposed.
Boards do well when they define and communicate to directors what is expected from their performance, just as they would with managers. Directors need a clear understanding of what is expected, beginning before they agree to nomination for a board seat. It is a powerful recruiting incentive to well-intentioned “A-list” potential directors to learn that they would be in the company of high performers who expect the best of each other and the organization. Meritocracies attract “A players”, and meritocracies require continuing performance, not resting on laurels.