Chapter 4 - Psychology of the board - 4th quadrant - 1 of 6 - cohesion and challenge

Question 1

What is board dynamics?

Answer 1

Board dynamics are the interactions between board members individually and collectively, and how these influence, and are influenced by, their wider stakeholder system.

Question 2

How do you become a high-performing team?

Answer 2

A board must appropriately balance cohesion and challenge

Question 3

What does Karl George say about bad board behaviour?

Answer 3

Bad board behaviour is the thing that scuppers good governance every time… It’s the number one reason why companies fail

Question 4

What did Solange Charas’ research show on the impact of board dynamics on a team?

Answer 4

Solange Charas (2017) found that demographic factors only amounted to 0.5% of performance, whereas board dynamics, and the impact of working together as a team, had an 800% or 8 times greater positive impact on profitability. Charas concluded: Boards that have healthy dynamics consistently outperform organisations with boards that are dysfunctional

Question 5

Name the four psychological theories.

Answer 5

• Psychodynamic – Signmund Freud - unconscious drivers and our inner conflicts which are mostly developed through our early childhood experience – Tavistock Institute*
• Behavioural – rejects the concept of introspection (mental and emotional processes) and values and measures observable behaviour. Skinner and Pavlov – stimulus and response
• Cognitivism – attention, memory, language and perception – has evolved with the development of computers and AI
• Humanistic psychology – acknowledges and studies the whole person and their potential, and focuses on topics such as creativity, empathy, motivation and meaning. Carl Rogers came up with this theory due to the lack of acknowledgement of more vital aspects of humanity in behaviourism. This approach has led to topics such as emotional intelligence and mindfulness

Question 6

According to Forbes and Milliken, what makes boards different to teams?

Answer 6

Forbes and Milliken: Boards are large, elite, and episodic decision-making groups that are networked to perform complex tasks in the realm of corporate strategy.

Question 7

What are the 10 specific characteristics that make a board different from any other group or team? SCOLICCEST

Answer 7

1. Strong personalities
2. Complex and strategic challenges
3. Outsiders
4. Large
5. Imperfect information
6. Commitment
7. Committees
8. Episodic
9. Stakeholder group
10. Time restraints

Question 8

What is the ‘three gears’ of board meetings model by Peter Hawkins? MSD

Answer 8

1. Monitoring (and mentoring via NEDs through challenge and cohesion)
2. Strategising
3. Decision-making

Question 9

What are the ‘three modes’ of board meetings by Richard Chait? FSG

Answer 9

1. Fiduciary Governing – resources are used efficiently and responsibly – budgets is the focal point – approving, rather than discussion
2. Strategic Governing – strategic thinking and planning – budget is no longer sufficient if resources are dedicated for the wrong purpose – key questions: what business are we in, what do our customers want, do we have competitive advantage and what are our key competences?
3. Generative Governing – framing problems and issues and making sense of them, so that goal-setting and decision-making are then possible

In summary, these particular characteristics of boards make working together a challenge. There are many opportunities for interference to the board fulfilling its potential, and managing the social psychological dynamics within boards therefore becomes particularly important.

Question 10

According to Katzenback and Smith, what is a team?

Answer 10

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

Question 11

What did the NHS research find on teams?

Answer 11

The higher the percentage of staff that worked in teams in hospitals, the lower the patient mortality i.e. more teamwork = fewer deaths.

Question 12

What is a group?

Answer 12

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

Question 13

According to Salas et al, what does a high-performing team possess?

Answer 13

Salas et al (2006) found that a high-performing team: possesses unique and expert-level knowledge, skills, and experience related to task performance and adapt, coordinate, and cooperate as a team, thereby producing superior or at least near optimal levels of performance.

Question 14

Dulewicz and Herbert measured 16 tasks, which cluster into which four areas of performance?

Answer 14

1. Vision, mission and values
2. Strategy and structure
3. Supervision of management
4. Responsibility to shareholders and other stakeholders

Of the four areas, researchers find that board chairs rated the ‘vision, mission and values’ factor as more important in order to be high-performing than the other three factors (although all were deemed important). In addition, 134 chairs surveyed – 91% voted this as vital to the performance of the board

Question 15

What is cohesion?

Answer 15

Cohesion is defined as ‘the tendency for a group to be in unity while working towards a goal or to satisfy the emotional needs of its members’.

Question 16

What are the benefits of cohesion?

Answer 16

• enhance decision-making by encouraging earlier and more extensive dialogue. This enables what is known as a ‘team mind’, an emergent team dynamic that is neatly captured by Bill Walton: Winning is about having the whole team on the same page
• reduce information asymmetry i.e. those who make the decisions and those who hold the information will hold the same information
• enhance motivation, team commitment and team member satisfaction will lead to higher levels of innovation, feeling of being able to apply one’s strengths and higher time spent on board tasks and sustained energy levels (good for long board meetings!)
• reduce levels of stress and anxiety significantly – teams with lower levels of stress also exhibit positive outcomes, such as higher creativity and higher levels of sustained performance and board members expressing challenge
• improve the ability to learn from its performance

Question 17

What is groupthink?

Answer 17

Groupthink is defined as a ‘dysfunctional mode of group decision-making characterised by a reduction in independent, critical thinking and a relentless striving of unanimity among members’.

Therefore, for boards to function at their potential, two things need to be true:
1. boards need to have a moderately high level of team cohesion; and
2. cohesiveness must be accompanied by an appropriate amount of challenge among members (to protect them from groupthink) i.e. ‘cognitive conflict’ which refers to task-orientated differences in judgement among team members such as difference in viewpoints, ideas and opinions

Question 18

How can a board increase the likelihood of challenge on a board?

Answer 18

If a board has a diverse board who have complementary skillsets, cognitive conflict is both likely to happen and be encouraged.

George Patton: If everyone is thinking alike, then somebody isn’t thinking. However, for the board dynamic not to descend into relational conflict between board members, enough cohesiveness also needs to be present

Theranos – US case shows how having well-respected leaders in their fields as NEDs can fail if they lack the expertise to challenge a director, or are too trusting of the executives they are working with.

Question 19

What does the FRC Guidance say on challenge in boardrooms?

Answer 19

FRC’s 2018 Guidance on Board Effectiveness: ‘The boardroom should be a place for robust debate where challenge, support, diversity of thought and teamwork are essential features. Diversity of skills, background and personal strengths is an important driver of a board’s effectiveness, creating different perspectives among directors, and breaking down a tendency towards groupthink’

Question 20

What did Project Aristotle find on the most effective Google teams?

Answer 20

The most effective teams are underpinned by a culture of psychological safety.

team members feel safe to take risks and be vulnerable in front of each other. It was found that individuals on teams with higher psychological safety were less likely to leave Google, more likely to harness the power of diverse ideas from teammates, brought in more revenue and were rated effective twice as often by their leaders.

Question 21

List some boardroom best practice behaviours as outlined by the ICSA: Boardrrom Behaviours (2009) research.

Answer 21

1. Supportive decision-making environment
2. Clear understanding of the role of the board
3. Common vision
4. Questioning of assumptions and established orthodoxy
5. Rigorous debate
6. Appropriate deployment of knowledge, skills, experience and judgement
7. Independent thinking
8. Challenge that is constructive, confident, principled and proportionate
9. The achievement of closure on individual items of board business