Boardroom tension and conflict is most likely to arise around decision-making, particularly over company purpose and direction, according to new research.
However, while tension is viewed as a “positive and necessary” characteristic for effective boards, boardroom conflict is “disruptive and detrimental”.
The views come from 35 face-to-face interviews conducted with chairmen, chief executives, company secretaries, CFOs and non-executives by Henley Business School for ICSA: The Governance Institute. The research, entitled Conflict and Tension in the Boardroom, was presented at ICSA’s annual conference in London yesterday by Professor Andrew Kakabadse.
The research found that while “tension” is resolved inside the boardroom, when it escalates into “conflict” it is dealt with outside “as informal discussion between board members”.
Researchers conclude that a good board is one with “managed tension”. Dysfunctional boards allow tension to “fester and escalate” into conflict.
Prof. Kakabadse said: “The chairman, company secretary and senior independent director are perceived as playing the most important roles in managing tension and conflict resolution. Company secretaries in particular play a critical role in conflict resolution, facilitating and maintaining boards’ ability to function.”
Those interviewed for the research revealed that conflict manifests in a number of ways, including passive-aggressive behaviour that can include a refusal to engage in discussion, or attempting to move debate outside the boardroom to discuss issues “offline”.
Respondents described seeing anger, frustration and hostility. Conflict can also appear as a point “repeated” over and over, as well as overt interrogation. Boardroom members also witnessed “physical behaviours” such as leaving a room, resignations and door-slamming.
Healthy boardrooms, meanwhile, were described as places where “robust debate” could take place and where concerns can be aired. The advantages were listed as helping to avoid “groupthink”, encouraging “constructive criticism” and “keeping board members engaged”.
But things can turn sour fast. One company secretary told researchers: “It can be surprisingly quick for tension to escalate to the point of being disruptive and damaging. It can happen in the blink of an eye, because it comes back down to an emotional response.”
The research found a number of ways for resolving conflict. One company secretary pointed to “diversity, variety and emotional intelligence” providing a telling factor.
One confessed that he seated clashing board members next to each other so they could avoid eye contact.
However, time outside the boardroom was a key ingredient for many. One CFO said: “There’s no substitute for the informal discussions that happen between board members.”
The research revealed board chairmen, company secretaries and senior independent directors having key roles in resolving conflict.
Chairmen spoke of having to “ensure that concerns get surfaced”.
One chairman said: “The job of the chairman is making sure that issues come on the table and people collide. You would love to think there would be no conflict, but actually there are issues to discuss, otherwise you will make a wrong judgement. The executive team need that supportive guidance, and that doesn’t just mean saying yes.”
Simon Osborne, chief executive of ICSA, said: “Challenge, scrutiny and robust debate in boardrooms are part of the effective oversight of management and the decision-making process, but can tip into confrontation.
“Tension and conflict are not only inevitable, but play an essential part in effective boards. It is only by understanding and embracing this process, that the best possible decisions can be reached.”