The effectiveness of a board is the cornerstone upon which organisational success is built, with the synergy, cohesion, and strategic prowess of a board setting the stage for a company’s success or failure. There are four main pillars upon which board effectiveness sits—people; information; structures and processes; and boardroom dynamics and board culture.
Of these, the two hardest pillars to get right are the ones that relate to board composition. Why? Because boards are comprised of people and people differ in a multitude of ways—getting the full range of skills in the relatively few seats most boards have is always a challenge.
The composition of a board is akin to assembling a mosaic, with each director contributing to the richness and depth of the collective, but no one piece resembling the other.
Variety is the spice of life
Board members differ in terms of expertise, experience and perspective and it is these differences which enhance the board’s ability to discern complexities, challenge conventional wisdom and envision possibilities beyond the horizon. A varied repertoire of skills, knowledge, experiences and personalities is a good thing.
Indeed, the quality, diversity, focus and dedication of board members are the things that underpin all the rest.
Board effectiveness, however, can be compromised by the very people there to ensure the smooth running of the company.
In my book Disaster in the Boardroom, my co-author Gerry Brown and I offered evidence-based insights into the drivers of behaviour on boards, and of the individuals who serve on them. As we mention in the book, corporate history is littered with cries of “Where was the board?” whenever a company collapses or becomes enmeshed in a scandal.
Little wonder that all eyes turn in the direction of the board, as directors are the people meant to ensure that companies are well-managed, financially secure and operate in the best interests of all stakeholders.
Walking the flaw
When things go wrong, it is indeed people, not organisations, who are at the origin. People understandably question the strategic acumen of a board and its ability to distil complexity into clarity, discern signals amidst the noise and anticipate shifts in the competitive landscape. But not all people are the same; not all directors can be accused of being ‘asleep at the wheel’. So, is there a way for boards to anticipate the personality types to watch out for and potentially avoid? I think there is.
Boards comprise many different personality types, six of which I wrote about recently in a piece for Harvard Business Review—the Narcissist, the Data Chaser, the Deferential Director, the Status Hound, the Stakeholder Champion and the Unprepared Director. Of the six that I highlighted, it is the latter that I find most frustrating (and I have heard others say the same).
Unprepared Directors hold the board back because they have not read the materials and need to be brought up to speed every time. Ironically, however, they are straight-forward to deal with. That is, if the other directors around the table can reframe the problem.
We rightfully tend to frame the Unprepared Director problem as that person not doing their homework. Directors not doing their homework feels like an unfair imposition on other directors, and a potential risk to stakeholders including employees, customers and shareholders.
Perceptions of fairness are highly emotive, so we tend to feel strongly that the Unprepared Director should address it by preparing or apologising. However, if we can get past our own emotions, the way to address this is to reframe the problem and offer support to that director in preparing them before the meeting.
Often, these people learn better through interaction with others, rather than reading on their own. So if we spend some time with them, we can bring them up to speed on what they need to know before the meeting.
Why would you do this? You should do this because this builds your relationship with that person, which creates an ally and makes YOU more influential. The thing is: in order to persuade others, you have to spend time with them anyway, which is much easier before they develop an opinion.
Get to them early, frame the information in a way that is supportive, and you are likely to have persuaded a colleague without spending any more time than you would have if that person had done the pre-reading. Ironically, we are the people making ourselves less influential—by letting our own emotions get in the way of doing what is likely to be in our own interests.
Board effectiveness is far more than just the perfunctory fulfilment of fiduciary duties and the ability of board members to steer organisations towards their strategic objectives while safeguarding stakeholders’ interests. It is entwined with the vibrancy of leadership, the depth of strategic insight, the resilience to navigate turbulent waters AND the ability to manage relations with other directors.
As stewards of organisational destiny, boards wield immense influence and shoulder major responsibilities. Informed decision-making, anchored in rigorous analysis and informed debate, enables the board.
While you might feel that being prepared is one responsibility that no good director should shirk, working with someone less prepared than you to improve the collective whole means that you will be more influential, and your board will be better placed to seize opportunities, mitigate risks, and navigate ambiguity with poise and purpose.
Randall S Peterson is Professor of Organisational Behaviour at London Business School and Founding Director of the school’s Leadership Institute.