High Performing Boards And Blind Spots They May Face

Yale Professor Jeffrey A. Sonnenfeld says that high performing boards are, “strong, high functioning work groups whose members trust and challenge one another and engage directly with senior mangers on critical issues facing the organisation.” I am sure every board member wants to be part of a high performing board, but what is it that makes the difference between a good board and a great board? When I observe boards and their behaviour, I start with the critical relationships like the chair who runs the board and the CEO who runs the organisation. I can tell a great deal about how the board will perform from this relationship. So too the relationship between the executive and non-executive provides great insight. By checking the composition of the board identifying skills, backgrounds, age and length of service, we have clues to help in determining good board behaviour.

 

Let’s go back to the definition as I pick out some key words that I think describe the best boards:

1. High functioning work group
2. Trust and challenge
3. Engage

These are all important ingredients but aren’t they also important for a good board or for that matter, for any board? I think you would agree that all boards should operate like this. The difference with a high performing board is that it brings all those elements together in a seamless way. A bit like how Manchester City are playing football at the moment. It isn’t enough to have great players they need to have chemistry to be able to work together- high performing boards do this well!

Boards have been described by Bob Tricker as; “…incompetent groups of competent people. We must ensure that as we bring people together they can operate effectively as a group. How they behave is more important than satisfying our governance protocols. It is crucial that boards conform but governance is more than compliance.

There are four types of dysfunctional behaviour for boards to be aware of and avoid. The first is group think. This occurs when board members share any common characteristics whether through background, profession, age, gender or even ethnicity, there is a tendency to look at things in the same way. The danger is that organisations become complacent. Large successful organisations can sometimes fall victim to this. The failure of the banks is an example of what can go wrong where there is no challenge to status quo.

Another type of behaviour is conflict which is typically found where we have a number of different stakeholders on a board, each with competing priorities, sometimes finding it hard to remember their common goals. I have worked with a few housing associations throughout my career where the tenants, independent board members and councillors each have their own objectives. This is not conducive to good board behaviour. Next there is the operational board who get bogged down with details and matters that should be dealt with by the executive. Small charities or family companies fall foul to this behaviour, so if you are involved in one… pay attention! Finally, there is the passive board where board members just turn up to rubber stamp agenda items. There is no open challenge or scrutiny. I have a few schools that operate like this who give control almost exclusively to the head teacher.

So, what are the 3 blind spots?

1. Cultural Myopia – organisations fool themselves and their boards into believing that they are better than they actually are. How we treat our staff and customers needs to be determined not by just looking at the indicators provided for at a board meeting. So much can be learned by visiting the clients or customers first hand or by networking with the staff at a staff conference for example. As a board member, I have often been approached by staff members who have encouraged me to look deeper than what is being reported to understand the real culture.

2. Sector Arrogance – Stating that “this is the way we do it in this sector” or when a particular sector thinks that they are above others demonstrates sector arrogance. I was at a board meeting recently where an executive officer was asked about complaints and why the indicator was so low. The officer was very confident and proud in saying actually that score is very high for our industry.

3. Good Old Days Syndrome – Do you remember the days when certain people said they would never use a mobile phone or the internet? Well, some people are still stuck in those days and their unwillingness to move on from them stagnates the progress of the board.

Whether you are a lay member or CEO, it’s important that you pay attention to signs and symptoms of any of these behaviours within your organisation. It is only be addressing board behaviour that governance becomes it’s most effective!

Until next time!