A lot of what a business achieves stems from how its culture is nurtured. Below Sharon Constançon, IoD Chartered Director (MBA, FCIS), discusses the ins and outs of a mature and efficient learning culture in the board room.
Discussion with a board chairman about the forthcoming Board Evaluation begins with the question – “What would a good outcome be in 3 months’ time when the Board Evaluation is complete?”
Chairman One – “Evidence that the board and directors are effective and at most you may suggest changes to some of our board papers.”
Chairman Two – “I would like my directors to engage in becoming the best they can possibly be, and for you to give me pointers on how to improve my chairmanship, thereby, us becoming more effective as a board.”
These are common responses to what is often seen as being a difficult question, because all too often the chairman has not thought through what s/he actually wishes to achieve from the process. Some pray for a “pass” so they can move on with the day job.
By contrast, a company secretary is looking for improved governance, greater effectiveness, director engagement and clear decision-making.
A chairman should be asking for insights about the board’s behaviour, effectiveness, competency as a leadership and decision-making body – ways to do it better, to see what might not be obvious, to be given clarity on what changes will deliver defined improvements.
Boards do not set out to be ineffective and humans gathered together around a table can always learn to be more effective, but no board will ever reach perfection.
Fear of being shown up
In my experience, Chairman One is feeling unsure (possibly even insecure) of their competency in the role, and could be concerned the board is not being effective. S/he may fear that the board Evaluation will identify this, which could significantly number their days in the chair.
A culture of survival or embarrassment in the face of peers, directors and the governance team, breeds fear.
Chairman Two, by contrast, is confident that great service is already being provided by themselves and by the board, but is open to learning how to be better. This breeds a culture of “being in it together” while developing a learning organisation. That means directors feel safe raising issues and sharing true facts in the evaluation process for the common good of becoming more effective.
Both chairman are in a position to learn, however one is readier to receive constructive criticism and recommendations than the other.
Ego Impact on Learning
A chairman has reached the top of the organisation, wants to be there for full term (or wangle longer) and the only place to move is down or out – like a cricketer being called out with very few runs. Not what the sportsman wants at all.
Personal risk stakes are high, so risk mitigation is required. The outcome is a closed view on learning – the input phase of recommendations and the rationale for them is seen as a personal failure and therefore best avoided.
It is difficult for any of us to be critiqued; we naturally feel vulnerable and defensive. This behavioural response in a Chairman is felt directly by the Directors as well as the governance team. It often contributes to a breakdown in communications simply because there is no comfort that this is a safe place to raise difficult conversations.
Chairman Two has a different reference point and the behaviour of this type of chairman typically results in a more successful evaluation project, and it will deliver valuable learning insights and practical recommendations.
Should evaluators therefore protect the fragile egos and refrain from addressing the issues? Or should they use good communications skills to encourage the board and chairman to see the light? Or, because the listening ear has been switched off, bluntly deliver their verdict?
To create a learning response, it’s important to work in steps which are designed to lead a board along a path of growing maturity and effectiveness, embracing change and enabling them to bind together to address shared and individual learning.
Directors should respect that the competence of the board is not solely the responsibility of the chairman. It is also their responsibility to actively support the chairman. This is a shared team effort that has a common goal; to be better and ultimately the best.
How do we reach those who need to learn?
It is interesting that boards that demonstrate the most effective cultures in delivering their responsibilities are the ones which are most open to further input and show a desire to go from “silver-standard” to “gold-standard”, supported by a competent and independent “coach”.
After all, we do not expect our Olympians to succeed without the critical input of various types of coaching ranging from physical ability to mental strength! The sportsman not yet on the winners’ podium continues to compete, to learn and make an effort to be better. Shouldn’t we expect the same of our boards and chairmen who have even more room for improvement?
The answer I believe lies in ensuring that boards and chairmen are respected, understood and responded to in the most appropriate manner to reach them. This will help start a change for the better and let everyone see and feel the benefits, transitioning them to being learning boards.
Any director, company secretary or chairman can lead on changing the culture and helping others to join the journey to that of being a learning environment. Handled effectively as a team, led with openness and transparency and without personal agendas derailing the efforts for change, miracles can, and do happen.
All board directors and chairman should consider honestly how open they are to learn to be better, assess truthfully how they respond to input or their own nagging feelings of inadequacy and work out what is personally needed to support them to become their best.
Provided the majority, preferably including the chairman, gets onto this path, the transition and improved culture will deliver quickly and will be felt by the whole organisation, particularly the executives.
Sharon Constançon, IoD Chartered Director (MBA, FCIS) practices as a Board Evaluator, Forex Treasury Adviser, Chairman, Non-Executive Director, Mentor and Coach. Sharon is CEO of Genius Methods which carries out Board Evaluations, Governance Development and Mentoring for businesses ranging from FTSE 100 to SMEs. Her experience includes many industries, business sizes and governance structures. Her focus is on the impact of culture and behaviour in boardroom effectiveness.