I sit on a board with two members who for the past year have said and done very little. Regardless, both were just re-elected unanimously with the support of the nominating committee. What is your take?
—Name withheld, New York
So, two seat warmers on your board were just re-elected unanimously, you say? Does that not mean you voted for them too? If so, do not worry. You are definitely not the only board member in history to endure an ineffective or otherwise dysfunctional fellow director. Not to slam boards. As a whole, they add real value.
But boards frequently tolerate troublesome performance from one or two of their members; it is simply too time-consuming or impolitic to eradicate. And that, unfortunately, is why too many boards—in both the public and private sectors—do not make the full contribution they could and should. To be clear, we are not talking here about board behaviour that is criminal. With a few famous exceptions, boards will remove anyone who does not adhere to the law.
No, we are referring to the types of boardroom behaviour that are perfectly legal but perfectly destructive as well. There are at least five by our count. Let us start with the type of bad board member your letter describes: “The Do-Nothing.”
Some of these individuals are too busy with their own companies, other directorships or their lives in general to care about your particular board. Some do not have enough skin in the game to work up authentic interest. And still others lie low for job security. At $25,000 (about Rs10.5 lakh) to $100,000 a pop in the corporate world, being a director can be very good money. In the private sector, prestige is often the reward. And so Do-Nothings rarely challenge or probe at meetings. Nor do they venture out into the field to take the pulse of the company checking to make sure that what they are hearing in the boardroom about values and strategy matches what employees are feeling.
Do-Nothings are awful but not nearly as dangerous as type 2 in our taxonomy, “The White Flag”. These people live in fear of being personally tainted by any kind of controversy, such as a class action lawsuit or activist protest. They lack courage—a key characteristic of any good board member. With every public or private challenge, they pollute the boardroom by hyperventilating for a settlement, even if it means selling out on principle just to get out of the cross hairs.
Sure, a board must settle a dispute on occasion, but never before seeing the organization through a thoughtful discovery of the facts. Such a process creates a culture of trust between management and the board and it is only in such an environment that risks can and will be taken.
“The Cabalist” is the third type of bad board member. This is the director who sits quietly in meetings—in fact, a Cabalist often goes along with the prevailing side—but then takes up a cause behind the scenes, building constituencies to achieve another agenda, namely his or her own. In many cases good board members shut down such practitioners of palace intrigue. But sometimes, a board’s Cabal is its own executive committee. The result is a controlling, secretive board-within-a-board that turns other directors into second-class citizens.
Such a dynamic decommissions the majority of the board’s brains—and what a waste that is—but it also undermines the board’s relationship with management. Senior executives never know if a board member is speaking for himself, the entire board or the Cabal. Good directors focus on big picture issues such as succession and strategy.
By contrast, consider our fourth offender: “The Meddler”. Instead of meeting with high potential talent and discussing industry dynamics, meddlers get all mucked up in operational details. They seem oblivious to the fact that board members are there for their wisdom, sound counsel and judgement and not the day-to-day running of the business.
And then, finally, there is “The Pontificator”. This is the self-important bloviator who cannot get enough of his own voice, especially when it is opining on “matters of state”, such as world events, social trends, the company’s history or his particular area of expertise.
Like Meddlers, Pontificators
distract the boards from the real business before them and enervate their colleagues in the process. As a board member, it is easier, of course, to let a couple of Do-Nothings stand around until retirement and to tolerate a few White Flags cowering while the rest of the group handles each crisis. It is easier to try to isolate or work around Cabalists and ignore Meddlers and Pontificators.
But imagine how much better it would be if nominating committees usually just focused on vetting potential members faced into the hard cases right in front of them. After all, no one can keep a board on its best behaviour but itself.
©2008/BY NYT SYNDICATE
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