Disloyal Boards? Think Again

Disloyal Boards? Think Again

Courting a business with a view to joining their board, I was asked to share my thoughts on board effectiveness and due to warmth with which my comments were received, I thought I’d share them here for your consideration and hopefully to provoke some thinking in your own business.

I have simple perspectives here… creating productive board governance isn’t as easy as many think and it isn’t always about absolute agreement! It requires time, dedication, and the right amount of effort from the right key players, at the right time.

For instance, Uber’s boardroom witnessed a remarkable event when a single dissenting member questioned the prevailing practice of surge pricing. Although initially as popular as cold porridge, this stance eventually led to an innovative flat-rate pricing model which, rather unexpectedly, gained significant traction!

Still, dissent within a board is often viewed with as much enthusiasm as a delayed train. The controversy at Facebook in 2018 provides an apt example. Jan Koum, a board member who dared to challenge the company’s privacy policy, found himself out in the cold, much like a solitary penguin in the Sahara.

It is imperative for company leaders to distinguish between dissent and disloyalty as it is all too easy to naïvely assume that disagreement is a signal of a lack of compliant loyalty. This is a distinction that can’t simply be wrapped up in nominating committee rules or guidelines for director resumes; it needs to be embodied and promoted by leaders themselves and embedded into their ethos, values and actions.

According to industry insiders, the most successful companies host boardrooms that warmly welcome such open and occasionally feisty debate, challenge and where appropriate, disagreement. They consider dissent a duty and leave no subject off the table.

Remember that board members, like good actors, must be ready to perform a variety of roles, offering them an expansive view of the business landscape, both the manicured lawns and the sun scorched rough patches!

Enforcing accountability is as necessary in the boardroom as maintaining etiquette at the King’s Coronation! Methods to ensure this can range from board observers through to good old-fashioned peer pressure, because nobody likes to be the one out of step at the royal waltz!

Finally, performance evaluations are critical, yet often overlooked, instead being regarded as simply unnecessary. My view here is that this is just wrong. They can include comprehensive board reviews, individual self-evaluations, and collegial peer appraisals but all should be treated as learning opportunities and a method of calibrating the effectiveness of the board and its members.

In a nutshell, corporate boards need more than just independent directors and an ethical compass. They must operate like a harmonious ensemble, unafraid to debate, challenge, and even share a quiet chuckle, all in the name of making better decisions, better outcomes and better business.

Just saying…