The importance of board culture 

The tone of the culture of any building society is set from the top – in the board room. As a board member, you tend to know when your board is working together well. There is mutual respect between board members, who appreciate each other’s differences and opinions. Discussion is open and animated, and these boards challenge each other in a constructive way, leading to good decision making. When times are tough, they pull together to find a way forward. These healthy relationships drive board and organisational performance.  

Yet London Business School research reveals that day to day, on two thirds of boards surveyed, many members experience dysfunctional behaviour. This ranges from little or no debate to significant interpersonal clashes. These damaging dynamics distract boards from fulfilling their responsibilities to the best of their collective capability. They also get in the way of getting business done.  

The ability to recognise these issues, call out such behaviour, and manage it effectively is an important skill for society chairs and all board colleagues. A good cultural audit of the board will highlight these challenges. From our experience at Praesta Executive, Board, Group, and Team Coaching of conducting board reviews, and from research, there are things to look out for and approaches you can take that allow constructive board dynamics to flourish.  

Spotting the signs
 

There are several common relationship challenges at board and committee level. The most frequent include the tensions between executive and non-executives sharing power. Especially where the remit and boundaries between governance and operations are blurred. In other extreme circumstances this can also lead to factions on the board which are so divided that colleagues have stopped listening to each other and reached an impasse. Here, negotiating this standoff is needed. In these situations the discord is clear on entering the boardroom.  

On other boards a culture of compliance or complacency can be just as risky. On passive boards the decision-making may in reality be made elsewhere, by a powerful subgroup of the board or one individual. Other board members will be held accountable for decisions but in reality have limited scope to act. They are simply compliant. Complacent boards are trapped in their “ivory towers” and out of touch with their core customers and markets, as well as with what’s actually happening in the business. They have also ceased horizon scanning to see what future economic, geo-political and other risks might arise in the future. So they miss risks as well as opportunities.  

The ART and psychology of board relationships 

Managing such situations is an art rather than a science. Research The Art and Psychology of Board Relationships: The Secret Life of Board Relationships based on interviews from seasoned board members has identify three elements of this ART:  

Awareness: raising your self-awareness of the interpersonal dynamics and your own contribution to them. Board members often point to personality clashes as the cause of relationship difficulties or they blame the presence of too many strong egos in the room. But there are other psychological elements underlying difficult dynamics. These are conscious or unconscious approaches we adopt to protect ourselves against pressure, such as absolute thinking, categorising things as good or bad to simplify them. This makes it easier to cope with a mass of potentially contradictory information. By asking yourself “what might I be missing?” or “how might l be wrong?” you can start to raise your self-awareness of the impact of your behaviour in the boardroom. Similarly asking for feedback from colleagues, board advisors or a coach is important.   

Relating: learning how to cultivate and prioritise healthy relationships. Board interviewees saw chairs and senior independent directors spending up to 80% of their time managing the relationships on the board to build trust and get the work done effectively. But everyone has a role to play. Getting to know each other personally and spending time together at board dinners, branch or site visits helps build trust and broaden perspectives. Also meeting the executives and employees in the organisation, helps understanding of the issues and strengths in the business to anticipate challenges.  

Tactics: developing tools and techniques for resolving difficult relationship dynamics. Referring frequently to the common vision and strategy of the organisation is key for colleagues to coalesce around.  Transparent roles and responsibilities ensure clarity of remit. Clear succession plans prevent boards from being held hostage by unacceptable behaviours, allowing for effective management of problem individuals.   Having a board of the right size for constructive debate is also important. If too large this leads to frustrations and factions.    

When Praesta has conducted society board reviews and development work, we’ve seen some impressive leaders using various approaches to get the best from boards - making the board much more than the sum of its parts. These research findings can add further to your tool kit to cultivate strong effective governance.   

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