I had the opportunity last week to participate in the NACD Chicago chapter program on “reducing board dysfunction to improve readiness”
- Greg Hedges, the chapter President and CEO, organized an insightful discussion with a panel that included:
- Cary McMillan, (moderator) serving on several boards
- Liz Micci, Partner, FGS Global; Crisis & Communications
- Hille Sheppard, Partner, Sidley; Legal Counsel
- Paulette Dodson, serving on several boards
My talk at the conference focused on several key reasons for board dysfunction and how to reduce it:
1) Lack of understanding of the specific role of the CEO versus the Board of Directors.
The key is to define roles….. “ management manages and boards govern”
- Set clear expectations
- Communicate the expectations
- Hold one another accountable
- Define the consequences
2) Lack of a strong lead director
The Lead Director (or independent chairman) must have the power to run the meetings, set the agenda, hold the other directors responsible, and be the primary contact to the CEO
3) Board does not operate as a well-functioning team
Board members must openly challenge one another, hold one another accountable, and be able to achieve conflict resolution in a respectful manner.
4) Unwillingness to hold one another accountable
Effective boards hold one another accountable, and do not tolerate behavior inconsistent with a well functioning team. Board member should be held accountable to high standards. If not achieved, they should be removed from the board.
5) Lack of preparation for the inevitable crises that will occur
The one thing every leader knows is that it will not be a question of if there will be a crisis, but only when. As a result, well functioning boards, participate in scenario planning and decide upfront what they will do when a crisis occurs. I simplify to doing two things:
- In an uncertain world, we will try to do the right thing
- We will do the best we can in the time available
Also, it’s critically important for the board to work with management to effectively communicate the situation. I define that in three steps:
- Tell people what you know and why
- Tell people what you currently do not know yet and why
- Let people know how quickly you’ll get back to them with what you didn’t know in #2
OK, one other topic and some really good news: Yes, it is almost July 1, and guess what baseball team is leading the central division of the National League? I feel the need to focus on this, since as a Cubs fan you never really know how long this could last😎
Here’s wishing everyone a great week and a great start to July!!!👍😁
Hey Harry – this was terrific. And deep appreciation to you for inviting me and to Greg and his team. Very impressive program. (Loved the walk up music!)
Afterwards, I thought of two ideas from your Kellogg course:
1) It is unethical to not give feedback. So, board members must be diligent about candid feedback to each other
2) the favorite chart – how we are all integrated in our collective roles here in the USA and on earth
Lastly, my sense was everyone in the room would love to have your skills in delivering feedback. And then I thought, well everyone should ‘grow’ those muscles. Perhaps the BoD should have a performance appraisal? And each member a leadership development plan? Otherwise it falls on one person to do the work they should all be doing.