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How to fix a dysfunctional board

by Goutham Krishnamoorthy

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Dysfunctional behaviour by board members can often go unnoticed because it is not openly acknowledged or exhibited in most cases. Let’s explore some of these behaviours.

Boards come in various shapes and sizes – public companies, family businesses, for profit, for purpose, but they are only as good as the decisions they make. A proper functioning Board is an excellent asset to any organisation, but sometimes there can be a few roadblocks that lead to dysfunction.

Symptoms of a dysfunctional board

Lack of decision-making – One of the board’s primary duties is to make decisions. An unproductive meeting is where the board does not stick to the agenda and often wanders to various discussion topics without any decisions being made. The main topic of corporate strategy does not get enough time for discussion, and the board often argues on trivial issues.

Lack of challenge – Irving Janis defines groupthink as – “a psychological phenomenon that occurs within a group of people in which the desire for harmony or conformity in the group results in an irrational or dysfunctional decision-making outcome. Cohesiveness, or the desire for cohesiveness, in a group may produce a tendency among its members to agree at all costs. This causes the group to minimise conflict and reach a consensus decision without critical evaluation.”

Challenging ideas leads to growth. It is a sign of dysfunction when the management team or other powerful voices on the board do not challenge any of their beliefs or proposals. The board agrees to everything suggested on the agenda without proper debate to avoid conflict; this often leads to rubber-stamping of decisions, and the board itself becomes a ruse to external stakeholders.

“A second board” – Sometimes a few board members might form a secret club where all the critical discussion happens, and all the decisions are made; this leaves out other board members from the process and can become a deterrent to the proper functioning of a board.

Micromanagement – There are occasions where the board members feel like they are part of the management team and get hugely involved in the day to day operations of the organisation. This can create a lot of friction between the board and management team because they feel disempowered, leading to dysfunction.

Apathy – A good proxy for apathy from board members is to check their attendance at board meetings; anything less than 50% is a sign that they are not contributing their fair share and look at the board position as a ‘trophy’ position. Sometimes members can attend board meetings but will not contribute to any discussion; this leads to a few influential voices on the board making all the decisions.

Fixing a dysfunctional board

Fixing a dysfunctional board requires a lot of time and tact; here are some steps a board can take to improve its culture.

Get the agenda right – They say “well begun is half done”, setting out a concise agenda with topics for discussion and time allotment is a great way to get the best out of board meetings. The board can set aside a good portion of the time to discuss strategy and long term goals rather than focus on operational topics. This will also ensure that the meeting does not wander into unimportant issues. The chairperson can ensure that the agenda items are covered within the stipulated time.

Organise away days – The board is a collective. Hence the members come with different sets of experiences and personalities. Building a good rapport and working relationships leads to great results in the long run. Organising away days is a great way to build trust amongst directors and ensure they have fewer inhibitions to express their opinions during meetings. This is also an excellent way to get to know each other better and tap into their area of expertise.

Set clear expectations through terms of reference – To ensure that the board is not interfering with the business’s day-to-day running and doing the management teams’ job, it is necessary to have proper terms of reference for the board and the sub-committees. This will ensure that there is a line in the sand drawn and everyone is on the same page as expected. The boards’ job is oversight and not business operations.

Encourage debate – The chairperson’s responsibility is to make sure that they get the best out of their board. Ensuring everyone is heard and taking on feedback from members is crucial for making better decisions. The chair also needs to ensure that no one individual takes over the whole meeting. Another way to ensure all voices are heard is to ask people to share feedback before the meeting if they find it difficult to express their thoughts during the meeting.

Get new members – New members are enthusiastic, and recruiting new board members will make sure that there are fresh ideas and energy in the room all the time. This is the responsibility of the nomination committee, and they should always be on the lookout to add new talent to the board. A proper skill matrix analysis should drive the recruitment efforts.

Perform board reviews – The board must review its performance at least once a year; this review could be done internally or could be done by an external party. It is a great time to step back and evaluate objectively. Reviews are an excellent way for board members to share their views on how the board is functioning and their suggestions on improving the board’s workings. This is also a great place to check the information provided by the management team and make sure it is correct and reach the board on time to enable them to make the appropriate decisions.

It’s essential to fix dysfunction

A well functioning board can help an organisation deliver on its vision and mission; given the flux, the business world is experiencing, every organisation requires proper oversight to create and maintain stakeholder value. It is now essential more than ever that boards evaluate themselves, focus on constructive debate, and put their organisations on the path to success.

  • Does any of this resonate with you and the working of your board?
  • What are some of the measures you have taken to ensure your board is functioning correctly?
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