Chapter 6 – Stakeholder conversations Flashcards
According to s.172, A director of a company must act in the way he considers, in good faith, would be most likely to promote the success of the company for the benefit of its members as a whole, and in doing so have regard (amongst other matters) to —
- the likely consequences of any decision in the long term;
- the interests of the company’s employees;
- the need to foster business relationships with suppliers, customers and others;
- the impact of the company’s operations on the community and the environment;
- the desirability for the company to maintain a reputation for high standards of business conduct;
- the need to act fairly as between members of the company.
According to Leary-Joyce and Lines (2018), what are the six lenses of board dynamics?
- The individual director
- The inter-personal director relationships
- The board team relationships
- The board team tasks
- The board’s stakeholder interfaces
- The board’s wider systemic context
Name some factors relating to the individual director lense
- Biology – physical well-being: appropriate nutrition, sleep, exercise and stress management
- Personality – emotional intelligence related aspects of directors are often neglected but are ultimately the key attributes for team functioning
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Life roles – ‘work-life balance’, which can lead to role conflicts:
o Time conflict – the extent to which the amount of time spent by one’s role interferes with their life
o Strain conflict – the extent to which the amount of stress that is created by one’s role leak into another role (e.g. not able to focus at home with one’s family due to pressures of work, or vice versa)
o Values conflict – the extent to which one is expected to do as a board member misaligns with what one holds true in one’s life values > imposter syndrome - Director roles – how directors perceive their role as a director in general will impact on how they behave
In terms of the inter-personal director relationship lense, according to Maister et al, how do you build trust?
There are four characteristics - 3 to improve and 1 to reduce
3 to improve:
o Credibility – track record
o Reliability – how dependable you are
o Intimacy – how safe people feel sharing things with you
1 which reduces:
o Self-orientation – whose interest is going to be put first within an interaction – the higher that the other person perceives your self-interest in the interaction to be, the less likely it is that they will trust you
What does research show on the characteristics outlined by Maister et al?
- Women are more trustworthy than men
- Every 10-year age group reporting, self-assessed trustworthiness goes up from age 20 to 80
- Most people consider credibility and reliability as the most effective way of building trust
- The most trustworthy type is strong intimacy skills
According to Eric Berne, outline the four stages of the levels of communication model to show how intimacy is built
- Ritual and cliché – hello, how are you or how was your journey
- Facts and information – formal dialogue - going through a standard agenda, reporting finances, etc
- Values and beliefs – when in a conversation and able to draw on this, we have the possibility to build trust
- Sharing one’s emotions and feelings – being comfortable to express a particular personal emotion about a topic
Trust is usually built during stages 3 and 4 in teams – groups do not tend to reach stage 3 or 4
Outline Eric Berne’s transactional analysis theory, in the context of the parent, adult and child ego states.
- Parent ego state – think, feel and behave as someone who is acting as a parent – ‘why haven’t you…’ or nurturing and expressing language such as ‘take care’ or ‘I’ll help you’ > invites the other person to go into their child ego state
- Adult ego state – more neutral and logical – able to examine data from both the parent and child, and often acts as mediator between the two. This is often the style of interaction required from the chair and co-sec
For good governance, one would hope both CEO and Chair act in an adult-adult relationship – CEO likely to have a bias towards action and impatience, whilst the chair’s role is to think about the long-term interests of the organisation – therefore, Les should look to hold back the CEOs views from immediate action and getting them to rethink their approach – therefore, from a transactional analysis perspective, the chair may be pulled into the parent ego state and the CEO may be pulled into their child ego state as a reaction
According to Patrick Lencioni, what are the 5 dysfunctions of a team? FILAA
- Fear of Conflict
- Inattention to results
- Lack of commitment
- Absence of trust
- Avoidance of accountability
Outline the 5 stages of team development developed by Tuckman.
- Forming stage – team meets and agrees on initial goals
- Storming stage – people begin to voice their opinions, which may result in task, process and relationship conflict. The assumption of this stage is that any differences must be resolved before the team can move on
- Norming stage – team begin to resolves differences and coalesce around a common goal – shift from a group to being a team
- Performing stage – establishment of mission, vision, roles and norms, such that team members can focus completely on achieving their common goal > high levels of performance
- Adjourning stage – mourning or transforming stage and is characterised by the team completing their task, breaking up, and ‘turning the lights off’ as a team – established in later Tuckman model
High performing board teams must be able to have constructive conversations.
Outline Kantor’s 4 Player Model – there are four roles required to produce productive ‘dialogue’: MFOB
- Mover – provides direction – often the role of the chair – direction, discipline, commitment, perfection and clarity
- Follower – provides completion – played by a director when they support a point, agree with a suggestion, or take accountability for a decision – completion, compassion, loyalty, service and continuity – co-sec can also play this role
- Opposer – provides correction – role is vital to counter any overly risk proposals by a mover and can also be important in preventing groupthink – often the role of a NED – correction, courage, protection, integrity and survival
- Bystander – provides perspective – another key co-sec role – highly observation role – provide perspective, patience, preservation, moderation and self-reflection - maybe just through taking minutes will fulfill this role?
What are the three types of conflict in teams?
- Relationship conflict – personal issues such as dislike among group members
- Task conflict – difference of opinions on how the team should go about a task
- Process conflict – using the resources such as who has responsibility for what
Jen and Mannix researched into the three areas of board conflict. What did they find?
i. Relationship conflict – most problematic and makes teams less effective
ii. Task conflict – beneficial to the quality of decision-making and discussion up until the midpoint of discussion – up to middle of storming stage
iii. Process conflict – beneficial if occurs near start of a task when the team is forming – up to end of forming stage
What are the board team task lens via Dulewicz and Herbert?
a. Vision, mission and values
b. Strategy and structure
c. Supervision of management
d. Responsibility to shareholders and other stakeholders
How can an external stakeholder lens be utilised?
Stakeholder mapping, engagement, adopting Stewardship Code, employee representation (compare to Germany)
What did the ICSA find in: The stakeholder voice in board decision-making (2017)
- Boards should identify, and keep under regular review, who they consider their key stakeholders to be and why
- Boards should determine which stakeholders they need to engage with directly
- When recruiting a director, a NomCom should take the stakeholder perspective into account
- The chair, supported by the board, management and co-sec should determine how best to ensure that the board’s decision making gives sufficient consideration to stakeholders
