10 Signs your Board may be dysfunctional
2021 is over. Whatever happened, you can probably meet that news with a sigh of relief. However, no time to breathe, here’s 2022. And looking ahead, the new year offers more of the same: ongoing pandemic, unclear government guidance and changeable support for businesses. The right strategy and good leadership are two key factors and if your board isn’t already performing well, it needs to.
So, with that in mind, and January being a traditional month for reflection, maybe it’s time to think about how you can boost the board’s performance. If you’re wondering where to start, the low-hanging fruit, so to speak, is to address what you’re getting wrong. What might that be? Here’s a list of common indicators that a board is not working at its best…
10 Board-Level Red Flags
- Firefighting not strategy – We’re now more or less 22 months into a global pandemic. By now, the firefighting stage should be past. If you’re still having to deal with unexpected situations, maybe ask the question, why were they unexpected? If you don’t have a clear vision for how you’ll emerge from this crisis, it’s possible you won’t.
- Power struggles – Directors share responsibility. If one or more directors (including the Chair or CEO) are using theirs to angle for more or further their own agenda in some way, that’s a distraction from board business; potentially an all-consuming one.
- Voting tactics/blocks – A board is democratic by nature. When a director or group of directs band together to protect or further their own interests by lobbying for votes, you’re unlikely to be exercising good, democratic governance.
- Talking out of school – Sniping and backbiting are not good on any kind of team but when it’s board members talking behind each other’s backs, you can be sure the board could be spending its time more productively. Likewise breaches of confidentiality. Sharing board information outside of the boardroom should be a potentially worrying sign. 1) There’s no need to feed the rumour mill; and 2) If information gets back to shareholders or competitors, well…
- Non-participating directors – Sometimes a director isn’t there to contribute, they’re just there for the prestige of the position/title. Non-executive directors (NEDs) can be a real addition to the team; non-contributory directors (NCDs?) are not.
- Overly interested in the tools of governance – Spending time unnecessarily on the company bylaws and other ‘rules of play’? They’re there to make business easier, not to become the business.
- Over-attentive management – The board’s role is strategic, high-level, using wide-ranging decisions to further the business’s overarching goals. Too much interest in day-to-day activities is not employee oversight, it’s micro-management.
- Disorganised meetings – When meetings don’t follow a clear agenda, when topics for discussion and decision get mixed together, when disagreements become arguments… the board is not operating at its best.
- Informal meetings – These rarely include everyone, which means someone is being excluded. Informal chats sound harmless but if board business is being done, you have to ask why some of the board is not included.
- A lack of trust – How is your board seen by the rest of the organisation? By management? By the workforce as a whole? You’re setting the direction and steering the ship – if they don’t trust you to do so, the board’s decisions won’t be implemented as planned, and you’ll probably see a hike in the staff turnover rate too.
Being a better board in 2022?
Ultimately, the above symptoms tend to point towards common problems. It’s either poor or unhelpful behaviour by individual directors, some kind of dysfunction in the group dynamic or how the board function as a team, or a board culture that has lost sight of the board’s role.
If you’re looking at 2022 and thinking your board could do better (even if it’s already doing well) then The Boardroom Effectiveness Company’s Moving from good to great in the Boardroom programme can help. Or give us a call on 01582 463465. We’re always here to help.