It sounds all so easy – you create a board and expect that this group will be able to add tremendous value. However, serving board members and observers as part of a board evaluation know that high-quality dialogue is not a given.
In this podcast, Dr Sabine Dembkowski, Founder and Managing Partner of Better Boards, discusses improving boardroom dialogue with David Clutterbuck, who has been involved with boards and governance for over 30 years. David is Visiting Professor at three universities and the author/co-author of 75 books.
"The board's role is not to do all this stuff!"
David starts by explaining that there are many "big issues" at present, but often some boards try to solve all these problems themselves. This is not the board's role. Rather, they should ensure that all these issues are identified and processes put in place to manage them, and then monitor the quality of these.
"Boards which are not very effective are still thinking in linear ways"
David explains that in times of crisis, the line between executives and non-executives becomes blurred. For him, one of the key qualities of a board is to be able to rise above the complexity and help the executive steer through it. His research into post-COVID leadership showed a capability deficit in boards compared to current needs in an ever-changing world. The need is not for linear thinking in terms of cause and effect, but one of system thinking.
"Organisations suffer from what we call organisational arthritis"
David outlines how systemic thinking involves identifying the many layers of an issue. This is increasingly important at the board level, where you have the internal systems and all the external ones, such as politics and economics. All these issues create a complex environment that is constantly evolving, and the board needs to be able to work within that complexity.
"Organisational climate is a big part of that organisational agility that prevents organisational arthritis"
David describes an increasing emphasis on values and ethics and recommends that at least once a quarter, a board regularly considers whether the organisation is living up to its values. You can create an agile climate in an organisation in many ways, but having a strong sense of ethicality makes it more likely there will be strong psychological safety in the organisation.
"We're using the most valuable time of the meeting for rubbish"
David relates that in studies of good boardroom practice in the 1990s, the typical board agenda started with up to 45 minutes of apologies for absence, minutes of the last meeting, matters arising and much which could have been done by email beforehand. He points out that the first part of the meeting is when brains are most productive before people start getting tired.
"What are the criteria by which we're judging this decision?"
David believes that how decisions are made is important. Voting is commonplace, but this tends to mean people go along with the majority and suppress contrary views. He explains that a much better way to decide is to determine the criteria by which the decision is judged.
The three top takeaways from our conversation are:
1. Don't get too involved in running the business. Recognise your role as a director, not an executive.
2. Think about why the board is there, which will help structure and prioritise discussion topics. Regularly, question whether the things you're doing are creating value for the medium and long term or only the near future and profitability.
3. Be the ethical conscience of the business, and do not forget the much bigger purpose.