Once again, at this time in the banking crisis, non-executive directors are coming under fire for not preventing mis-management leading to disastrous consequences for the company.

The critics evidently expected the non-executives to be able to control the actions of management. Ironically it may have been the non-executives’ own perception (gained from the ‘combined code’ of the London Stock Exchange) that they were expected to behave as ‘policemen’ that made them ineffective in dealing with the problem.

A number of studies have shown that boards are most effective where management and non-execs cooperate and freely exchange information. This is unsurprising. Where, by contrast, there is confrontation and lack of trust between the two groups on the board, management tend to withhold information from non-execs. Moreover, when relationships lack trust and mutual respect, the influence that directors can exert on each other is greatly diminished.

Non-execs can never hope to ‘control’ management in a large company. But they can set a style or induce a culture of ethical conduct. They can speak candidly to management as trusted colleagues and discourage excess. None of this is possible in a confrontational board in which some directors act as ‘policemen’.

The principles of mutual trust and the free flow of information apply well beyond the boundaries of the board of directors. Successful managers everywhere recognise them as essential ingredients of successful organisations, especially those undergoing rapid change.