A board of directors is a body of elected or appointed members who jointly oversee the activities of a corporation or organization. Source: Wikipedia
According to surveys commissioned by the UK Centre for Effective Dispute Resolution (CEDR), the most common topics of Boardroom disputes are:
- 40.3% Financial, structural or procedural workings of the organization
- 38.4% Personal behavior and attitudes of directors
- 37.2% Strategy development, including mergers and acquisitions
The impact of Boardroom disputes on the business:
- 49.3% Wasting management time
- 44.9% Distracting from core business
- 43.8% Reducing trust among board members
Frequency and difficulty of complicating factors:
- 52.5% Issues over competing factors on the board
- 49.6% Issues regarding the emotions of those involved in the dispute
- 49.2% Conflict of personal or family interests versus interest of the company
Skills training those Board members most frequently want:
- 74.8% Ability to deal with different personalities
- 73.0% Ability to give and receive constructive feedback
- 70.1% Ability to have difficult conversations
- 69.5% Communication skills
From my personal experience – let me add a few more thoughts:
- Do you know the individual talents of the Board members
- Have you ever talked about the skill set they could bring to decision making
Are they a board member just because they have a marketable name – and they make your organization more appealing?
If any of these thoughts sound an alarm – then reader – you are not acting Behaviorally Smart.
A dysfunctional Board holds up decision making, causes headaches for the organization, and slows progress. It’s time to get in and sort them out. Remember, most Boards have subcommittees, so first find the root of the dysfunction.
Consider this, board members are already successful in their own right, so they bring with them a significant array of useful talents. But they also bring ego, bias, and unchecked behaviors. So if board members are not in sync with one another and their focus is not on the role they have been asked to fulfill – agendas will be confused, decision-making will be more difficult, and the organization will suffer.
Any decision-making body must be structured; not only regarding the way they conduct business but also from the standpoint that all members understand and respect each other’s opinion.
This structure is not achievable if the board lacks understanding of the personalities, communication styles, attitude towards finances and biases in play. The decision-making process will be stunted or fall apart altogether.
The most effective way to assemble a cohesive board of directors is to have everyone complete a behavioral assessment such as the DNA Behavior Natural Discovery process. This platform provides deep behavioral insights to predict business risks and bridge gaps in communication. It is a Behaviorally Smart approach to ensuring that the business of the Board is managed competently and wisely so that the organization can function well and deliver outstanding results.
By discovering board member personality insights it is possible to predict the group dynamic, their challenges and of course any go to behavior under pressure that might cause operational risk and poor decision making. You will see below the surface of the individual, and this will significantly impact how they work together.
Boards of directors are expected to perform, as in a fiduciary relationship, as an extended arm of shareholders in overseeing and controlling management activities in a manner that promotes shareholder interest. But when board members do not work well together, this type of environment stifles productivity and prevents board members from sharing constructive opinions. A meeting may become a venue for personal attacks rather than for focusing on coming to business decisions or providing constructive discussion.
Five Keys to Boardroom Success
- Know the board members
a. Identify their talents and determine where they fit in overseeing the organization
b. Discover their personality and communication style; this will radically impact the way in which the board is chaired, how discussions take place and more importantly, identify any potential behaviors that, under pressure, could gravely impact the business of the board.
2. Appoint a board member whose personality is that of a facilitator and is given the boardroom authority to manage the discussions
3. Appoint a highly creative, out of the box, thinker who may well be able to suggest solutions worthy of discussion that resolve a matter.
4. Conduct a specific talent discovery process and openly reveal the talent and experience in the room.
a. This shows the extent of the board room think tank
b. This delivers respect as board members defer to the colleague with the greatest experience in a particular area
c.This takes trust from management to a whole new level when they see the board members respect each other for the skills they bring to the table.
5. Using the DNA Behavior Natural Discovery process, produce a boardroom team report that identifies the following:
a. Behavioral gaps needed to have a balanced viewpoint in the room
b. Strengths and limitations of the board members and how to use/manage them
i. What are the issues most likely to raise tensions?
ii. What are the bias and cultural challenges the group will face?
iii. What personality gaps persist?between key players such as the Chair and the CEO?
In conclusion: Jeffery A Sonnenfeld writing about good governance for the Harvard Business Review makes the following observation:
For a board to truly fulfill its mission, it must monitor performance, advise the CEO, and provide connections with a broader world. ?It must become a robust team whose members know how to ferret out the truth, challenge one another, and even have a good fight now and then. https://hbr.org/what-makes-great-boards-great
Only when you understand the personalities in the room can you determine whether the discussion is robust or chaotic.