Decoding is a skill taught at school, for both language processing and computer processing. It’s also a vital skill we need to learn for the boardroom, as it helps directors navigate its dynamics.
The Board of Directors is constituted as a leadership collective with the sole purpose of providing strategic oversight in the best interests of the organisation and all its stakeholders. As such, the people who have been appointed to the Board are considered to be trusted individuals with exemplary skills and experience and impeccable ethical credentials, who are eminently capable of addressing the challenges confronting the organisation.
However, the Board only meets once a quarter and in the few hours at their disposal are expected to resolve a range of complex issues, from ethical dilemmas to balancing competing stakeholder interests. This combination of high expectations, assertive individuals and constrained circumstances provides the backdrop for an intense engagement with its own unique characteristics. At face value, the Board meeting is no different from any other formal business proceeding focussed on effective decision-making. But, like all forms of human interaction, it is characterised by a unique combination of strengths and weaknesses.
By virtue of its constitution, the Board’s strength derives from its mandate to provide accountability and oversight and its unique position as the embodiment of the organisation on behalf of all stakeholders. Boards can drive stakeholder alignment and organisational strategy set the tone for the organisation, provide insights into improving operational performance, and develop a positive organisational culture.
This important structure with its noble intentions can however easily be undermined and mis-used if it isn’t functioning optimally. And due to its pivotal role in the organisation, the effects of a dysfunctional Board environment are wide-ranging and potentially destructive. This dysfunction can derive from benign influences such as organisational inefficiencies and a compliance culture leading to slow and ineffective decision-making that negatively influences the organisation’s ability to respond timeously to challenging operating conditions. Or it may be a deeper issue arising from dysfunctional relationships amongst the Board members themselves. It may also be exacerbated by mischievous managers and shareholders intent on deceiving the Board for their own ends. At the extreme, it can be destabilised by the criminal intent of unscrupulous actors colluding for personal gain.
The lesson is to be on the lookout for the tell-tale signs of Board dysfunction and act quickly to counter these malign influences. It can sometimes be found in the lack of transparency and the paucity of meaningful information contained in a Board Pack, the bullying behaviour of a Board member or Board Chair, or the way ethical boundaries are constantly shifting, depending on the lucrative nature of the opportunities being considered. Noticing and responding to these boardroom dynamics is a key responsibility of every ethical and effective Director and a critical skill required to maintain the credibility, coherence, and functioning of the Board. Only with a healthy dynamic, can it continue to fulfill its ethical and leadership obligations and have a positive impact on the organisation.
Written by: Joy-Marie Lawrence, your Coach in the Boardroom
A seasoned Board Director, Independent Non-Executive Board Director, and Boardroom Coach
The Founder of Boardvisory