When ABC stands for appallingly bad conduct….take two

You’ll remember I ended last week’s blog on the subject of abject behaviour saying we’d need another blog to bring the theme to an end – and here it is.

So let’s look at a few more examples before we close the chapter and look ahead to brighter days around the boardroom table.

No session on boards going bad would be complete without mention of that perennial poison, conflict of interest. As with last week’s example, what makes this one particularly galling is that it is again committed by a legal professional, who should know better.

Here’s the scenario…a director of a statutory authority in the health sector is also the managing partner of a law firm that has, quite legitimately, provided a very good legal service to the authority. But when the need for work in a specialised area of law was required and the CEO briefed and appointed a firm of lawyers renowned and respected for their expertise in this particular niche, the director was outraged.

Why, she demanded to know from the CEO, were these invoices coming in from another legal firm? And why was the work not going to her practice which, after all, had long provided a very good service?

Of course, her self-interest seriously clouded her judgement and she simply could not see through a cloud that now had a thick haze of anger and rage around it to further impede her view. She failed to understand that appointing specialists for this highly technical matter was in the best interest of the company…and that she, as a director, should always place the company’s interests ahead of any other.

Now, perhaps the best has been kept for last – and it’s to do with dysfunction around the board and between the board and management. If not confronted and dealt with, it WILL simmer and it WILL eventually explode into an almighty mess.

I’ll share two examples from personal experience, the first being where the board of a large not-for-profit had long enjoyed the somewhat notorious reputation of being a dyed in the wool old boys club, with scant regard for skills or gender diversity.

The problem was, the group did not govern well and had lost the confidence of management. So when management developed its strategic plan to share with the board, it actually developed two versions. The first was rather mundane, the second terribly exciting and strategic, with big changes mooted.

But the relationship between board and management had so deteriorated that they didn’t trust the board to treat the exciting strategic stuff in confidence. And they strongly suspected this stuff was too ‘out there’ for the board to approve, hence the two plans, with the mundane one going before the board.

The second example highlights the totally unacceptable behaviour that can result when the relationship between board and management becomes toxic.

Picture this: management puts up a paper – granted, a rather ordinary, ill-conceived paper – on KPIs for the organisation and before the presentation has got beyond the first paragraph, one of the directors is questioning and challenging just about every word. By the time it gets to page three, he’s totally exasperated, rips the pages from his board pack and hurls them at the managing director, sending them on their way with a barrage of foul language.

Criticism, of course, is valid and should be encouraged. It’s the behaviour that’s anything but!

Until next time,
Kate.

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