I am a director on a private board. Our business is facing many challenges, like rising cost-of-capital, and I feel our chair is not effectively managing our meetings, given the pressure. Disagreement is disrespectful and sometimes it feels like we fall into groupthink without proper enforcement of meeting protocol. What are my options to help the chair get things back on track?
An effective chair is absolutely essential to creating an effective board. Accordingly, it is critical to work with the chair in aiding his or her effectiveness.
In our recent research, Benchmarking Board Performance: Learnings from 500 board reviews, it is surprising that at least 25 per cent of boards are dysfunctional. And many of those boards don’t even know that they are dysfunctional or what they will do with their dysfunction. Self- management of the situation is extremely difficult with an ineffective chair and a group-thinking board.
Our approach to such situations is systemic. A four-step process is ideal. First comes the diagnosis. Take a non-confrontational look at the board, not just the chair, through an independent external review. Ideally, this will be by a benchmarked quantifiable board survey, enhanced and managed by an independent specialist for effective communication.
Next comes design. This is all about clarifying and articulating. A report on the board to the chair in the first instance can carry meaningful messages and strategise actions for change and development. Additionally, a confidential report for the chair’s eyes only can sometimes be helpful. But know that this is not all the chair’s responsibility. Directors also have a role to play in their communication styles, actions and expectations.
Thirdly, it’s time to deliver the report — including the board and chair action plans — in a constructive and positive way. Sometimes, this can be done by a lead director who has the confidence of the chair and board. It is often better done by an independent adviser who will take the lead — or heat — acting with credibility and sensitivity as well as bringing in knowledge and ideas that can help the board and the chair. A key point here is not to load blame onto the chair’s shoulders — as if that was the singular problem in the board’s dilemma.
Finally, it’s time to embed the change. This takes more concerted action, over time. Coaching on this can include establishing ground rules for meetings and strategies by the chair for encouraging diverse perspectives — plus interpersonal strategies for all board members in dealing with disrespect or challenges. Accordingly, ongoing coaching for the chair and the whole board can add immeasurably to this process. Also, in-camera sessions at the end of each meeting are always helpful.
Groupthink
This is as much a problem for a board as is the domination by an individual chair or director. The fix is to find the balance between trying to create an amenable collegiate group of directors while also encouraging individuals to step up with creative or bold ideas. So, it is important to deeply understand human dynamics, beliefs and behaviours in order to effect change. It takes time, guidance, goodwill and interpersonal intelligence.
Board dynamics
These can be aided immeasurably by consciously engaging the whole board in understanding their communication styles, beliefs and expectations. All too often, we unconsciously presume that everyone thinks like us. There are many techniques and exercises to bring this conscious communication to the boardroom at an individual and collective level.
Results focus
Experienced directors and specialist advisers recognise that it is about much more than getting the right scores on the board survey. It is really about achieving the changes and results in boardroom behaviours. Only then will the dysfunctional chair be able to shift to leading a highly effective functional board.
Peter Kronborg FAICD is chair of Peakstone Global in association with Westlake Governance.
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