David White looks at how unhealthy board behaviours can derail a board and ways to go about changing them.

The board is considering a crucial topic; the debate is dominated by one or two voices. Other board members struggle to get their contributions put forward, let alone considered. One board member criticises another’s understanding of the topic. The debate drags on consuming time slated for discussion of another pressing issue. The meeting concludes without either matter being satisfactorily resolved, and the organisation must continue without the guidance that only the board has the authority to provide.

Sound familiar? In such a situation the board’s dynamic has failed. There are no agreed behaviours upon which board members can fall back to help them get through challenging issues.

The ways in which board members behave, individually and collectively, inevitably impact on the overall performance of the board, and consequently the organisation. These behaviours form the board’s culture.

The NRMA board struggles of the 1990s, when personal agendas and destructive behaviours threatened to derail the organisation at a time of crucial change, show the dangers of poor board culture.

A positive culture enables the board to perform better. The atmosphere at work – which we define as “culture” – is 70% driven by leadership and this culture impacts significantly (20 to 30%) the performance of the organisation¹.

What is board culture?

“Board culture” covers a number of aspects. It includes: the expectations board members have of their board colleagues and of themselves; the behaviours board members display conducting their duties before, during and after board meetings; the ways in which the meetings themselves are conducted; the values on which the board and the organisation operate; and the rules of engagement governing the way in which the board and executives interface.

Board culture can be driven by many different factors, such as the backgrounds and experience of the board members. A significant contributor at most board tables is the level of emotional intelligence, or EQ, of the members. Another driver can be the structure of the organisation. In federations, and other structures where board members are appointed to represent particular interest groups, those appointees need to balance the interests of their appointors with the overall best interests of the organisation. This balancing act is often the source of tensions on the board.

…where hidden agendas, conflicting loyalties or personal issues are not being played out.

What is a positive or healthy culture? One where the group dynamic facilitates effective decision-making processes. This in general means a culture which maintains an environment of respect, cohesion and openness, and where hidden agendas, conflicting loyalties or personal issues are not being played out.

Importantly, a healthy culture is also consistent with the organisation’s values and promotes the achievement of its mission.

A positive culture then helps the board to set “tone from the top” – enabling it to role-model positive behaviours to the rest of the organisation.

Implicit board cultures

A board will always have a culture. If there is not an express agreement on how board members are to work together, there will be some kind of default culture operating.

Some boards have an effective and cohesive board dynamic which grows naturally from the individuals around the board table. This may occur for a number of reasons such as similar backgrounds, the influence of positive role models on the board or experience or training in ‘healthy’ board behaviours.

…people are there for the right reasons, there are no sleepers, everyone loves the product and they are supportive and constructive.

The Beacon Foundation helps secondary school students prepare for a successful transition from school to employment.

When its board reviewed its performance, one of the highlights was how members described the way they worked together. They related that:

• The dynamic in the board meetings was effective, constructive and collegiate. “Magnificent, perfect”.
• There was no lobbying or pushing of agendas outside board meetings.
• Chairing of meetings was generally effective and done respectfully, and the meetings were inclusive of all directors. “The chairman is an open book and has no second agenda. There is no sense of an inner and outer sanctum.”
• “It’s pretty healthy – people are there for the right reasons, there are no sleepers, everyone loves the product and they are supportive and constructive.”

While, the Beacon board does not have an explicit written protocol, the openness and respect embedded in the board’s culture promotes effective decision-making and strategy development, and continues to contribute to Beacon’s success.

However, the default culture may not be so healthy. It can be based on self-protection and survival rather than the good of the organisation. Or the board’s effectiveness can simply be compromised by inadequate processes which waste board time and contribute to poor decision-making.

How an explicit board culture helps

Where the culture is not healthy, it is beneficial for the board to spend time on the issue reflecting on its ways of doing things. For a board that is not used to looking at itself, the process of discussing, agreeing and codifying culture allows the members to consider the collective and individual ways of doing things – how it goes when they are working well together, what is happening when they are not working well. The process also allows the board to ensure that the way in which it works, and the principles which guide its execution of its roles, are consistent with the values and the mission of the organisation it is governing.

Writing and formally adopting an agreed culture is another powerful tool. A written protocol can provide:

• A record of the board’s agreement about behaviours, which carries with it the consent of all board members to behave in those ways
• A simple way to explain to prospective candidates for board appointment, or new appointees, how the board works; and a method by which incoming board members can be asked to sign up to that way of working
• A readily available, and implicitly acceptable, reference point for a board member to call what they might believe to be inappropriate behaviour: “Chair, we have agreed that this board works best when all members have an opportunity to contribute to the discussion. It seems like this discussion is being dominated by a couple of voices.”
• A useful tool for the board to review periodically its performance, by asking: How well have we acted in accordance with our agreed protocol, and lived up to the standards we set ourselves? And considering what if any changes could be made in the light of its experience during the period under review.

Developing an explicit board culture

The chair-led approach

One way to implement this process is through strong leadership from the chair, or a senior board member.

Greening Australia is a national non-profit with a mission to engage the community in vegetation management to protect and restore the health, diversity and productivity of Australian landscapes. It consists of a national body, Greening Australia Limited (GAL), which oversees the broad strategic, financial and prudential issues, and subsidiary organisations based in each Australian state and territory which address environmental issues and connect with Greening Australia members at a local level.

The GAL board at that stage comprised representatives from each state and territory organisation, with only the chair being notionally non-aligned. Board members faced the familiar challenge in federated organisations of balancing the interests of the state or territory body, which had appointed them, against the interests of GAL as the parent body, and the wider interests of the whole organisation. This competition of interests meant that board members found it difficult to make decisions that altered the balance of power between the states and territories and the parent body – even though the future viability of the organisation clearly demanded change.

In 2012, the GAL board led a significant restructure of the whole organisation, a restructure that required strong leadership from the board to succeed. The chairman, a businessman with a wealth of boardroom experience, recognised that a stronger board culture was needed to provide that leadership. He was also clear about the specifics of the board dynamics that needed to be addressed.

Hang on, we agreed that we wouldn’t re-negotiate things we have already agreed…

Assisted by the consultant who had been working with the GAL board, he developed a draft protocol on how they worked together. This protocol expressly addressed behaviours that could derail the transition; its thrust was therefore unique to the GAL board’s circumstances with the restructure. For example, the protocol proposed that: “Our primary obligation and focus as directors is on the best interests of GAL and the GA group as a whole, and that is the hat we put on when we walk into a GAL board meeting”.

The board debated the draft protocol at a board meeting, quickly reaching consensus around its principles. After some discussion on the wording, the board adopted the final protocol at that meeting.

This protocol is now circulated with the board papers, and its provisions are noted at the beginning of the meeting. The protocol serves as an exemplar of the behaviours that the board sees as essential for the future sustainability of the organisation in the context it operates in, and that will need to be adopted across Greening Australia. It is therefore designed to lead organisation-wide culture, rather than conform to it.

… the board protocol created a safe environment … to fiercely debate the path forward.

Board members are empowered to highlight behaviours that are contrary to the protocol. For example, the protocol provides that: “Once decisions have been made, we do not engage subsequently in re-negotiation around those decisions, but focus on getting them implemented, and support them strenuously at state and territory level.” If the need arises, this allows members to say, “Hang on, we agreed that we wouldn’t re-negotiate things we have already agreed, so let’s not start doing that now”.

With the restructure, the shape and composition of the GAL board was also changed substantially, and the protocol formed part of the induction process for the incoming directors.

According to Rod Douglas, GAL’s National President and Board Chair, leadership requires the ability to take significant risks, especially when the outcome will be major change. “The development of the board protocol created a safe environment for the board to fiercely debate the path forward, knowing that once agreed we would all stand aligned,” said Douglas. “‘One Greening Australia, One Mission, One Team’ was our path; the protocol made it possible.”

The agreed protocol

Collective action by the board

Sometimes boards recognise that they could be performing more effectively, but cannot pinpoint what is adversely affecting their performance.

Better Future² is a non-profit focused on leadership for sustainability.

…the times spent on various agenda items were not always proportionate to their importance…

While working with SVA Consulting, Better Future’s board recognised that it could be more effectively leading the organisation. As a result, a consultant attended some board meetings, observed what happened, and shared the observations at the end of the meetings.

The board became aware of issues such as: that the times spent on agenda items were not always proportionate to their importance; the frequent lack of clearly expressed outcomes on agenda items following discussions; and the difficulties experienced when issues were discussed at large without a proposal to debate.

The board then held a facilitated session to reflect on questions about how the board worked best together, and what the conditions were when things weren’t going so smoothly (see below). As a result, the board developed a protocol called “The way we do things around here” which sets out the things the board members expect of each other and themselves. It also deals with the positive behaviours that assist the board’s effectiveness before, during and after the meeting.

This protocol is different to the Greening Australia example in that it is more focused on process rather than issues of principle. For example, the board specifically addressed the way in which board members would behave before and after the meetings, by proper preparation and taking responsibility for action items allotted to them. The difference in the two protocols also demonstrates that a board’s culture is unique and must be relevant to the organisation and its people, and therefore does not respond well to generic platitudes.

The Better Future protocol

How to establish an agreed board culture

There are two effective ways to establish an agreed culture: observation or reflection. The most appropriate method depends on the nature of the board and the inclinations of board members.

Observation

In this method, a third party observes the board in action during a board meeting. These observations provide insights about what actually occurs. Board members need to agree to be observed during the meeting, and for their behaviours to be discussed.

The steps involved in the observation method are:

Find an astute and observant third party willing to help – someone who can be relied on to keep confidential anything dealt with in the meeting. Someone with a reasonable degree of boardroom experience is preferable. An external consultant with whom the board is comfortable or a trusted adviser or associate is usually a good choice.

Reflect on whether these behaviours are consistent with the organisation’s mission and values.

Authorise the observer to watch what happens during the meeting: how directors individually and collectively behave during the meeting, how the chair deals with director interplay, and how long various discussion items take in comparison to their apparent relative importance.

At the end of the meeting, have the observer feed back to the board their observations on process, interpersonal actions, and time spent on various items.

Request that the observer follow the usual requirements for effective feedback in such circumstances – that it is specific, factual and respectful, and based on what actually happened rather than on something hypothetical.

Have the board discuss the observations and consider: current positive behaviours which should be captured and promoted; things that might be done differently; or ways in which board members might more positively engage with each other. Reflect on whether these behaviours are consistent with the organisation’s mission and values.

Agree on what can be put in writing and formally adopted by the board as part of the way it does business.

Reflection

In this method, an external facilitator guides the board through some thought-provoking questions, encouraging discussion and participation from all members. (While a board member could facilitate the process, it would likely compromise their participation.)
The questions can include enquiries like:

• What does this board do really well?
• What does this board struggle with?
• When a board meeting is going really well, what is happening – what can we see and hear?
• When a board meeting is bogged down or loses its way, what is happening – what are we seeing and hearing?
• What kind of behaviours do we value?
• What behaviours will we not stand for?

Responses are brainstormed without stopping to debate them, and gathered on a whiteboard as they emerge.

If a particular question is not working for the board, it can be reframed, or dropped.

When all the questions have been covered, the board reflects on the answers; debates controversial ideas; and looks for recurring themes comparing them for consistency with the values and behaviours by which the organisation operates.

As with the observation method, the board considers whether there are ways in which things could be done differently to promote more effective board meetings, or in which board members can relate more appropriately to each other.

The agreements are written down in a suitable form for adoption by the board. This can be delegated to the facilitator or a board member.

Better board performance

A board will always have a culture. If there is not an express agreement on how board members will work together, there will be a default culture operating. This may be based on self-protection, survival or simply learnt behaviours rather than a dynamic that is necessarily beneficial for the organisation.

While working in a positive environment is always preferable, promoting board culture is not an end in itself. For the board to be most effective and to make the best strategic decisions to support the organisation’s performance, building and maintaining clear and healthy board behaviours is vital.

If you’d like to know more, contact us on consulting@socialventures.com.au

Endnotes

1. Richard E. Boyatzis, Becoming a resonant leader

2. The name and other identifiable details of this organisation have been changed for confidentiality.