Test Yourself Questions Flashcards
Why is there a growing interest in board dynamics in governance in recent years? (6)
- Many high-profile organisational scandals in companies that seemed to tick all the technical board-compliance boxes but failed nonetheless
- amplified focus on human factors, e.g. human capital, talent management, organisational culture, employee engagement, diversity, resilience and wellbeing
- shifts in approaches to organisational leadership
- increased focus on organisational ethics
- tentative inclusion in global corporate governance codes of principles that acknowledge behavioural factors
- shift away from a simple focus on structural factors in board research
What is “board dynamics” - how does it fit into other aspects of governance?
“Interactions between board members individually and collectively and how these influence, and are influenced, by the wider stakeholder systems”
How board behave, and misbehave, rather than about what tasks they do.
How discuss, rather than what.
Offers a group and behavioural perspective on governance, rather than more technical or individual perspective.
What are different aspects of board structure and how do these affect board performance?
Unitary or two-tier. Unitary (executive, majority executive or majority non-executive).
11 Cs:
1. Basic set-up
3. Chair set-up
3. Director set-up
4. Board tasks
there is no direct evidence that states unequivocally that a certain structure will lead to better outcomes.
What are most relevant demographic characteristics that are prerequisites of modern board members and do these lead to better board performance?
Three of the most likely prerequisites for selection onto a modern board are: (1) not having too many existing board commitments; (2) evidence of financial expertise; (3) representing diversity.
These do not in themselves lead to better board performance.
What is the difference between board dynamics and boardroom dynamics?
Boardroom dynamics = interactions between board members individually and collectively in the boardroom and what the balance is between them being cohesive and being challenging.
Board dynamics = includes this definition but also considers how the internal boardroom dynamics influence and are influenced by their wider stakeholder system, external to the board. Thus, board dynamics also incorporates the broader topics of culture and systemic stakeholder management.
How can boards make better decisions?
By attempting to become more evidence-based and by minimising decision bias.
Ways to reduce bias: (1) educating the board on how cognitive bias affects us all; (2) evaluating and discussing the individual director’s personality and decision-making preferences; (3) applying decision tools to board decision-making process; (4) considering how to respond to board-specific issues, such as board size, board and committee meeting quality, board diversity, board leadership culture and board stakeholder conversations.
How do we know when board director relationships are working well?
(1) Board members will mutually trust each other, such that they will see each other as reliable and credible and that the relationship is mutually beneficial. They will also feel comfortable discussing their personal beliefs, opinions and feelings about topics, such that there is a degree of intimacy.
(2) They will talk to each other as equals, in “adult-adult” terms, rather than talking down (as a parent might do to a child) or being beholden to (as a child might do to an adult) the other person.
How do we know when the board is working well as a team?
Tuckman’s model, we might see that a board has progressed to the performing stage, charactised by the board having an established mission, vision, roles and norms, such that members can focus compeltely on achieving their common goals.
They will be free of most or all team dysfunctions described in Lencioni’s framework.
Following Dialogue theory, they will also be well connected by taking turns to speak, they will have a good balance inquiry and advocacy and other to self statements, as well as at least a 3:1 ratio of positivity to negativity.
Board will display a degree of challenge but when conflict does occur, it will be based on the task and process (when appropriate) rather than relationships, and will be appreciated, as individuals will have the ability to challenge constructively, rather than destructively.
What is “board culture”, how can it be understood and how can it be influenced?
Board culture is the repeating patterns of the board dynamic. These more visible patterns of behaviour emerge from the less visible shared values that have become integrated into how the board works.
Shared values include and assumptions: (1) board and director roles (e.g. “institutional guardian” vs “public watchdog” = “free agents” or “group members”); (2) relative power of CEO and Board; (3) approach to ethics; (4) internal vs external focus and short vs long term; (5) tasks vs relationships.
Culture can be influenced by making assumptions explicit (can be reconsidered if necessary), role-modelling (especially by Chair); communicating more widely.
How can a board become more diverse?
Becoming more diverse as a board is often assumed to mean simply recruiting more people from society minority groups. May be necessary but does not guarantee a board will become better.
A successfully diverse board will be one that strategically reflects and can effectively represent the diversity of key stakeholder relationships.
Not only diversity of demographics, but also of psychographics to ensure diversity of thinking is encouraged and facilitated.
Based on evidence, what are the most vital aspects of meeting design to get right in order to influence a board meeting outcome positively?
Some design characteristics may be more important than others to get right.
Physical characteristics seem more important. Need to consider research and personal experience - the participants and one’s context.
Describe what is meant by the company secretary being a “strategic leader”.
This does not mean they are expected to be out front barking orders and setting the direction.
Rather, due to unique position, respect and independence, they have the opportunity to lead “invisibly” through “smart power” and informally facilitating, relating and connecting as much outside the boardroom between directors one-ot-one as within the boardroom environment.
What are some leadership tools available to CoSec to influence?
(1) building collaborative and trusting relationships through selflessly and non-defensively developing credibility, reliability and intimacy with others
(2) developing one’s personal, operational and strategic network through connecting with hubs, pulse takers and gatekeepers either face-to-face or digitally
(3) acting with political savvy combined with integrity
(4) telling effective stories to communicate and convince
(5) challenging with radical candour
What are the key aspects of board talent management?
The Board must understand (1) the governance requirements of their country, sector and industry; (2) the size and composition required; (3) board and committee mandates/charters: (4) the established position descriptor for board roles
and therefore, (5) the skills, experiences and personal qualities and behavioural abilities that the directors need.
Once clarified, need a strategic process for recruitment, induction, L&D, performance management and succession.
What is the current state of board evaluation in the UK?
There is an increasing awareness, usage and rigour.
However not yet mature, standardised or professionalised.
Most companies beginning to complete evaluations, internally and externally driven, catalysed by organisational scandals and governance code requirements.
Providers beginning to meet demand, but currently follow no externally recognised benchmarks of quality.
Shareholders and investors gaining interest in behavioural aspects of boards, also driving the trend to more evaluation and rigour.
