Chapter 4: Psychology of the board

Question 1

Karl George (Managing Director of the Governance Forum) on bad behaviour

Answer 1

“Bad board behaviour is the thing that scuppers good governance every time. The people element of governance is so essential. It’s the number-one reason why companies fail.”

Question 2

Tracey Long (expert in board evaluation):

Answer 2

“There is an assumption that companies survive because they have optimal governance structures. However, for practitioners and scholars alike, corporate governance and board performance are inextricably linked but little understood. We need to know more about behavioural dynamics.”

Question 3

Leblanc on board structure

Answer 3

“Clearly, board structure is not as important a factor in determining board effectiveness as is normally believed”

(interviewed 194 directors on 39 boards)

Question 4

Definition of board dynamics

Answer 4

“Board dynamics are the interactions between board members individually and collectively, and how these infleucen, and are influecned by, the wider stakeholder system.”

Question 5

Psychodynamics

Answer 5

Study of our unconscious drives and our inner conflicts - childhood experience. Freud, Jung.

Question 6

Behaviourism

Answer 6

Developed in reaction to highly subjective, quasi-scientific and largely falsifiable methods of psychodynamics. Rejects introspection as unit of scientific data - only values and measures observable behaviour. (Skinner).

Question 7

Cognitivism

Answer 7

Post WWII human mental processes (attention, memory, language and perception) come back onto psychological research. Evolved in setep with computers and AI. Linked to personality theory.

Question 8

Humanistic psychology

Answer 8

mid-20thC in reaction to limitations of psychodyanmics and behaviourism. “Third force”. whole person and healthy potential - focuses on creativity, empathy, motiviation and meaning. (Rogers, Maslov).

Question 9

Social psychology

Answer 9

Sociology meets psychology - phenoema of social influence and gorup dynamics. (Lewin)

Question 10

Systems psychology

Answer 10

looks at human behaviour as a complex system - systems thinking also in computing, ecology, environmentalism and even politics.r

Question 11

Forbes and Milliken definition of boards

Answer 11

Large, elite and episodic decision-making groups that are networked to perform complex tasks in th ereal of corporate strategy

Question 12

10 specific characteristics that make a board different from another group or team

Answer 12

1. only meet periodically and at low frequency
2. solve complex and strategic challenges
3. Operate with severe time constraints
4. work with imperfect information
5. includes outsiders
6. members can have high public profiles
7. other board/leadership commitments (members)
8. Expected to represent stakeholder group
9. Typically larger than SMTs
10. Have specific, often lengthy compliance processes

Question 13

What are the three board gears (hawinks)

Answer 13

1. monitoring
2. strategising
3. decision-making

Question 14

What are the three modes of governing (Chait)

Answer 14

Type I - fiduciary
Type II - strategic governing
Type III - generative

Question 15

What is a group?

Answer 15

“Two or more people who interact with one another. share similar characteristics and collectively have a sense of unity”

Question 16

Why has it been argued that boards can’t operate as teams?

Answer 16

AGency theory - conflicting motiviations - group never able to work jointly towards a shared goal

Question 17

NHS Ledaership Centre 2004 research

Answer 17

Higher the percentage of staff that worked in teams in hospitals, the lower the patient mortality.

Question 18

Katzenback and Smith (1993) definition of teams:

Answer 18

A small gorup of people with complementary skills who are committed to a common purpose, performance goals and approach for thwich they hold themselves mutually accountable