There's nothing like a downturn to show up the error of a company's ways. Which is why non-executive directors should learn to assert themselves earlier

As you pack away your swimwear for another summer, you might reflect on the comment of legendary US investor Warren Buffett in this year's letter to his Berkshire Hathaway shareholders: "It's only when the tide goes out that you learn who's been swimming naked."

There will be a lot of red faces around boardroom tables this month—and not all caused by a failure to apply suntan lotion. With gloomy news about rationalisations and redundancies, cuts to marketing and training budgets, recruitment and salary freezes, many boards will be asking themselves hard questions about how they got into this mess and, more importantly, how they are going to get out of it.

Blaming the global economic downturn is neither helpful nor justified. Many companies' current problems stem from getting carried away with a sense of their own omnipotence during the recent boom years. But what goes up must, inevitably, come down, and the best companies will have strategies in place to cope with a downturn.

The majority probably won't, though. The banks' lemming-like dash into high-risk securities shows the same absence of strategy and vision as most companies' poorly timed entry to and exit from China, or the marketing-led scramble onto the "green" bandwagon. It takes a brave board to zig when everyone else is zagging, but the herd mentality of most British businesses is a sight to behold.

But if new research by Cranfield School of Management is anything to go by, the pretty pass that a large swathe of UK plc has come to is not surprising. The survey into the role, contribution and performance of UK directors paints a picture of what can only be described as dysfunctional boards.

It found that an astonishing 85 per cent of non-executive directors (NEDs) lacked a shared view of the vision and competitive advantage of the companies on whose boards they sit. On what basis, then, do they make decisions for those companies? The answer lies perhaps in another survey finding—that NEDs often nod things through in the belief that the executives know best.

The executive directors, meanwhile, trust neither the chairman nor the NEDs, which clearly compromises the ability of the latter to contribute effectively to strategy setting. The research also highlighted a lack of clarity among all board members about the purpose of their particular board.

It seems that the concern of the late Sir Derek Higgs, who updated the Combined Code five years ago, that companies would adhere more to the letter than the spirit of corporate governance, have proved well founded. Companies are regulated these days to within an inch of their lives, but the evidence suggests that boards' overwhelming focus on their backward-looking monitoring role gives them little time to cast more than a glance into the future.

The penalties of the retrospective box-ticking approach are exemplified in high-profile casualties such as Northern Rock, where the NEDs appeared to simply fall in with ambitious CEO Adam Applegarth's increasingly high-risk strategy. It is also evident in the saga of Equitable Life, where the NEDs seemed to have little idea what was going on.

One of the reasons so many non-executives are ineffectual is that they are too busy. The Cranfield research suggests that having six or seven chairmanships or 10 NEDs is not uncommon. Even if they turn up to meetings—and many don't—the most such people can have time for is to question the accounts.

The late Tiny Rowland, former CEO of Lonrho, once likened NEDs to Christmas tree decorations, calling them "pretty but useless". More recently, ITV chairman Sir Michael Grade quipped that the difference between a NED and a supermarket trolley is that the trolley has a will of its own.

But board effectiveness—or the lack of it—isn't a laughing matter, and it is worrying that there has been so little apparent progress in three decades. As the economic tide ebbs further still, many boards—not to mention their shareholders—will no doubt be wishing they had put more effort into hiring NEDs who were tough, hard-working, committed, independent and challenging, rather than adornments to the headed notepaper.