Building Better Boards – in partnership with The Chairman’s Network
On Wednesday 11th of July Christine de Largy, Chair of Harvey Nash Board Services, in partnership with Caroline Hayward of the Chairman’s Network hosted a discussion for board members and Chairs focused on topics raised by our annual Board Research Report. The discussion centered around; the implications of a close relationship between a Chair and CEO; the skills needed to be a Chair in 2018 and for the future; and the advantages and risks of taking conversations out of the board room.
- A persisting issue that arises in businesses across the spectrum is often the closeness of key members of the executive team, usually the CEO and the Chair. It was discussed that this can often lead to a conflict with the rest of the board and lead to outside forms of lobbying, discussion and decision making which harm the boards integrity. As such there is a need to educate both the CEO (especially founders and major stakeholders) as well as the Chair on best practices to encourage a more balanced, vibrant and functioning board. Board evaluations are also a useful tool to identify and remedy these dysfunctional practices.
- Taking the conversation ‘offline’. Increasingly we are seeing Networked Leaders operating outside the traditional hierarchical structures of companies. This is also the case for Boards. Increasingly conversations are occurring outside the boardroom, with 50% of our respondent saying they regularly discuss board related issues in smaller, more informal conversations. These can help facilitate the Board’s discussion if they are about sharing and understanding information in preparation for the formal meeting. However, when these discussion turn to decision making and lobbying it can serve to increase group think and encourage operators. There is a need to ensure that offline meetings are used only to facilitate and compliment board meetings not to supplant them or encourage insider and outsider groups.
- What does it take to be a chair in 2018? There was a time when taking on a Chair was considered the first step towards a comfortable retirement, that’s not to say it has not always been a challenging role, but increasingly the role of the Chair is becoming more and more complex. With an increasing in diversity of thought boardrooms, as the new FRC governance code says, should not necessarily comfortable places. Greater regulation is encouraging boards to take on more responsibility and the growth of millennial mind-sets is further challenging the traditional dynamics of a board room. As such there is a need for Chairs to be more emotionally sensitive, open, curious and humble in their approach.
All of this requires a re-think not only in the way Chairs operate but also in the way Chairs and NEDs are appointed, which our research shows is invariably through the boards own network. Clearly a more robust, objective process is required to ensure truly independent and effective independent directors on boards.