Director Coaching

Managing the social system of a board

By: Dale Simpson, Managing Director Bravo Careers

“It is clear from the study that board rooms are becoming suffocating places to work. Directors are being crushed by the weight of compliance, the fear of failure, the institutional shareholder pressure to avoid risk and the escalating scrutiny by the media and regulators.….That is worrying at a time when business needs to embrace innovation, move to more rapid decision making, foster a diversity of robust views and be willing to take more risks.”

SOURCE: https://www.afr.com/chanticleer/directors-look-at-boards-with-brutal-honesty-20151203-glf1gq

This quote - coming from a report by Blenheim Partners and Macquarie University Graduate School of Management and based on interviews with more than eighty chairpersons, directors, and chief executives of private and public companies - suggests there is a need to urgently review how our boards are operating.

In a very interesting HBR article from some years ago, the idea that technical or structural approaches, such as putting in place rules and procedures and selecting the skills and experience composition of the board carefully are ALONE what will give us great boards is challenged. The counterpoint notion suggested in the article is that we would be better served acknowledging and dealing with the adaptive challenge of managing the social system that a board is.

It’s time for some fundamentally new thinking about how corporate boards should operate and be evaluated. We need to consider not only how we structure the work of a board but also how we manage the social system a board actually is. We’ll be fighting the wrong war if we simply tighten procedural rules for boards and ignore their more pressing need—to be strong, high-functioning work groups whose members trust and challenge one another and engage directly with senior managers on critical issues facing corporations.

“What makes great boards great” Harvard Business Review

What is needed, this article suggests, is a virtuous cycle of respect, trust, and candor.

This raises questions about how we can:

Find the courage to be heard when we disagree with a fellow board member we respect utterly and do not wish to embarrass or seem to be belittling?

Ensure we are listening intently to points of view we may utterly disagree with?

Leverage our dis-agreement to get to the better outcomes?

Be authentic – for example, willing to ask the naïve question and let go of ego, a need to bolster our reputation or sense of power?

Genuinely collaborate rather than compromise? Genuinely agree rather than collude?

…one good quality builds on another. Team members develop mutual respect; because they respect one another, they develop trust; because they trust one another, they share difficult information; because they all have the same, reasonably complete information, they can challenge one another’s conclusions coherently; because a spirited give-and-take becomes the norm, they learn to adjust their own interpretations in response to intelligent questions.
…the most important link in the virtuous cycle is the capacity to challenge one another’s assumptions and beliefs. Respect and trust do not imply endless affability or absence of disagreement. Rather, they imply bonds among board members that are strong enough to withstand clashing viewpoints and challenging questions.

“What makes great boards great” Harvard Business Review

I think one of the most important statements in this quote is the bolded component.

I would invite you to consider when in your experience as a director - or indeed as a member of any group that involves decision making whether it be a volunteer committee, a project team or a family decision -when have you experienced this level of trust, the strength of bonds that can withstand “clashing viewpoints and challenging questions”?

Consider for a moment what are the personal qualities that need to be in place for this to happen? I would suggest these might be such qualities as courage, authenticity, self-knowledge, self-awareness, emotional intelligence…wisdom perhaps or even maturity (not a word we hear used much these days)

Self-awareness is a pivotal attribute. According to Daniel Goleman in The Focused Leader, Self-awareness has two aspects. The first is interpreting, but not blindly following, what your gut or your inner voice tells you to do. This means paying careful attention to various physiological signals—your heartbeat, your breath, and so on. The more closely you read them, the better you’ll use your intuition.

Studies bear this out. Consider what a British research group learned when analysing interviews with 118 professional traders and 10 senior managers at four City of London investment banks: The most successful traders—those with an annual average income of £500,000—didn’t rely on just their gut instincts or analytics. They focused on a full range of emotions when judging the value of their intuition. When they suffered losses, they acknowledged their anxiety, became more cautious, and took fewer risks.

In contrast, the least successful traders (whose income averaged only £100,000) tended to stick with their initial instincts, ignoring their anxiety. They made poorer decisions because they failed to heed a wider array of internal signals.

The second aspect of self-awareness is authenticity or being the same person to others as you are to yourself.

This involves paying attention to what others think of you, particularly people you trust.

The variety of focus that’s critical here is “open awareness,” in which we broadly notice what’s going on around us without judging, censoring, or tuning out.

Leaders who aren’t accustomed to receiving input in this way may find this tricky. Matching your view of yourself with how your most trusted colleagues see you is a good way to check your authenticity.

In order to be better board members – the best directors we can possibly be to create the best boards we possibly can, we need to develop the adaptive, interpersonal skills we have discussed as well as the technical skills we bring to the table;The courage, humility, self-awareness, and authenticity needed to make a great board great.

How we do this might be a topic for another day, but it might start with: