The key to board effectiveness is "a properly functioning board where mutual trust and respect lead to open, informed and timely debate on any and every aspect of a company’s affairs”, according to Don Argus in the recent AICD white paper, Mind the Expectation Gap: The role of a company director.
The white paper, authored by Steven Cole, is a timely analysis of the impact of ever-increasing expectations and regulatory requirements being placed on corporate directors.
For me, it also highlights how good communication and interpersonal skills can enhance board effectiveness and efficiency, particularly given the increasing workload on directors.
Ted Evans reinforces this point in the white paper saying: "Managing interpersonal relations and dynamics amongst board members and with senior executive management is a challenging and time consuming task. It is often harder than the substance of the issue being deliberated on.”
Some enlightened boards, recognising that interpersonal skills and individual styles can impact the board effectiveness, are engaging leadership development experts to enhance the board’s functioning.
For example, in one of our current assignments at Stephenson Mansell, we are individually mentoring each of the directors of a major organisation, as well as running team sessions with the full board. This assignment is designed to increase the effectiveness of every individual director, as well as to enhance the board’s functioning as a team and its interactions with executives. In the team sessions, which we do on live topics at board meetings, we practice techniques such as seeking and giving effective feedback, group process skills, and techniques for enhancing skills to enable robust and inclusive discussions on strategic topics.
As Adrian Furnham writes in his insightful book, The elephant in the boardroom: the causes of leadership derailment, it is necessary for boards to be fit, focussed and functional, otherwise a dysfunctional team at the most senior level can lead an organisation into terminal decline. He describes the conspiracy of silence as the ‘elephant in the boardroom’, saying it is a common coping mechanism for directors who don’t have a trusted environment in which to air their views.
Furnham also says it is the role of the chair to get the best out of each director and ensure they are clear about their roles and engaged on the joint agenda.
With this in mind, below are five ways to be a more effective director and create a more effective board:
– All board members should recognise that they have a responsibility to continue their development, especially in relation to their role as a director. Given the strong focus on regulation, governance and the technical aspects of board roles, there is often little time to focus on people and management skills. Yet these skills can make the difference between a good board and a great board. Board effectiveness is greatly enhanced when all directors have an opportunity to be heard and feel safe to express their views without complying to subconscious agendas.
– In the past, most boards were made up of former CEOs or senior executives who had had an opportunity to develop their executive skills over a long career. As we aim for greater board diversity, we are seeing a wider range of appointees, some of whom may not have fully-developed executive skills. For example, many female directors have chosen to become a director at an earlier point in their career than their male counterparts. In these instances, development is critical for optimum potential. This can be achieved through individual 360s combined with a number of sessions with a mentor related to the board role focusing on developing strategy or more complex thinking skills, influencing skills, communication or self-management.
– Many boards appoint individuals who have had high-profile careers and whose skills and experience stack up on paper. Yet few examine a board candidate’s people skills. This means some board members may have high emotional intelligence and interpersonal skills while others’ are woeful. If we understand and examine the mix of skill sets which are required and select and develop board members on this basis, the effectiveness of boards will improve. Even so, adults require ongoing focus on their own self-awareness and development otherwise their personal learning and understanding will stagnate and their thinking and perspectives will be limited.
– To be an effective board member, non-executive directors need to invest their own time into the organisation they’re involved in. This means much more than turning up to board meetings well prepared – it means devoting time between board meetings to better understand the operational aspects of the business and the challenges and opportunities faced by the business and industry. Importantly, this involves NEDS meeting a diverse cross-section of people throughout the organisation – gaining exposure to high potential candidates for succession to help them form their own views and getting a personal feel for the culture at the ‘coal face’ and not just as it is represented by the executive level.
– Finally, the most effective boards are those with members who bring to the boardroom diverse skills, knowledge and abilities. This could involve continued learning across areas as diverse as leadership, strategy, psychology, spirituality, ethics and history. I have read that directors should have "innate curiosity”. This means they read and listen widely, are open to new experiences, and look to every new conversation with a desire to better understand the person they’re conversing with and the world in which they live.
Virginia Mansell is Executive Director of the Stephenson Mansell Group, a pre-eminent Australian leadership development firm. She holds a BA in Psychology and Statistics, a Postgraduate Degree in Counselling Psychology, and has been a registered psychologist for 18 years. In 2009 Virginia published her first book, The Focused Executive: Leadership & Management Skills in Challenging Times. www.smgrp.com.au