Corporate governance

Jan B laden is managing partner of Governance Creed, and qualified as the first accredited board director of the Mud ar a Institute of Directors( I oD) in Dubai. An independent board member on several boards, B laden was formerly the lead and senior execu

Why good boards fail: part 9

Each month, the managing partner of Governance Creed, Jan Bladen, takes us through one of the top 10 reasons good boards fail and how to improve your chances of survival

PRINCIPLE 9: LACK OF TEAMWORK

The guidance on board effectiveness issued by the United Kingdom’s financial reporting council states: “An effective board should not necessarily be a comfortable place. Challenge, as well as teamwork, is an essential feature.” Board members should be appointed to the board for their wisdom, strength of character and courage in making decisions and judgments concerning difficult and complex matters. It is therefore inevitable, essential, and healthy for boards to have a certain amount of tension, disagreements, and challenge.

It is one of the most challenging responsibilities for a chairman to manage those conflicts, disagreements, and creative tensions within the boardroom that may be negatively affecting the effectiveness of board meetings. When board members feel comfortable around each other, they will feel free to speak their minds, unafraid of being criticised and opposed. Challenge and criticism will still occur and can’t be avoided in a team of strong personalities, but they transpire within the limits of professionalism, not personal outbreaks.

Over the years of working with boards and conducting board assessments, I’ve often noted from experienced board members that it’s not always what they say that is important, but more often how they say it; amplified by what they don’t say. Being able to respectfully disagree with a fellow board member without being disagreeable is an acquired and highly valuable skill set.

Witnessing a board that is capable, via conversation and disagreement, to reach a final consensus, is the fruit of a strong team. Research demonstrates that strong teams are built around mutual trust and respect and that a board chairman should actively seek to build a team spirit around the boardroom table.

Another experienced and retiring chairman recently confided in me (during a board assessment mandate in an oil and gas company) that, based on his experience, “an effective boardroom team of good individuals is substantially better than an ineffective team of boardroom experts”. He also highlighted the importance of “removing a rotten apple before the rot spreads to the rest of the barrel”.

When board members feel comfortable around each other, they will feel free to speak their minds, unafraid of being criticised and opposed