Behaviour

Keeping collegiality in check

The topical travails of Harvey Weinstein and his alleged sexual abuse of women is a timely reminder of one of the greatest potential pitfalls of a board – and that’s when the directors become too friendly among themselves and/or too in awe of a powerbroker on the board.

While some board members have subsequently said they did question him, the undeniable truth is that the majority of the board of Weinstein Co. turned a blind eye to the toxic corporate culture built and led by their friend and charismatic movie kingpin.

It’s a classic case of governance in freefall that extends beyond the abuse allegations to claims that Weinstein spent millions of dollars of the company’s funds on his personal projects. And while this is an extreme example, it does remind us of the dangers when a board is too friendly. Continue reading

The risks of “Groupthink” in Boards and Executive Management Teams

Governance Matters Associate Guy Hamilton looks at the risks of groupthink in Boards and Executive Management Teams…..

 

A definition: “The practice of thinking or making decisions as a group, resulting typically in unchallenged, poor-quality decision-making.

Groupthink is a phenomenon that occurs when the desire for group consensus overrides people’s common-sense wish to present alternatives, critique a position, or express an unpopular opinion. Here, the desire for group cohesion effectively drives out good decision-making and problem solving.”

“there’s always a danger of groupthink when two leaders are so alike”

I am increasingly interested in Groupthink and how it creates the real risk of sub-optimal decision making. Consider the numerous cases of corporates purchasing a “strategic asset” to “complement” their core business activities only to dispose of the same within 3-5 years as a “non-core asset”. It poses the obvious question of how a strategic imperative can become non-core so quickly assuming some quality analysis and planning was undertaken as a precursor to the original acquisition?
Continue reading

Bringing bad directors to book

The world’s full of good and bad – good and bad foods, good and bad books, good and bad movies. The list is endless and somewhere in there you’re bound to find good and bad directors.

As it’s the bad directors who threaten to disrupt the good workings of the board and, in turn, the entity they serve, it’s worth having a look at just some of the tell-tale signs of bad behaviour.

But before we do, it’s best to consider what we can do about it, to turn it around for everyone’s benefit. After all, we’re all about finding solutions to issues and challenges, right?

The short answer is: talk to the chair as it is their responsibility to lead an effective and functional board.

And if the chair won’t address it and allows the bad behaviour or practice to continue, there’s your problem – a deeply deficient chair who needs replacing…and a reminder of the old proverb that a fish rots from the head.

Let’s get back to bad behaviour.

You may wish to start by asking yourself whether you have ever seen any of the following happening at board meetings…
Continue reading

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.
Continue reading

When ABC stands for appallingly bad conduct….

I thought I’d spend a couple of minutes today mulling over a few situations where the behaviour of a board member has done nothing positive for the organisation and its smooth functioning.

Nada!

And perhaps most disturbing is that it’s more often than not done without realising the negative implications and comes down to ignorance, hubris, nepotism or an inability to convert the intellectual into the practical – or any number of toxic cocktails of the three.
Continue reading

Orica ‘explosion’ highlights payout pitfalls

Corporate bullying has been in the news again lately, this time the incident at mining explosives supplier Orica in late March grabbing our attention in the media.

But when the TV and radio news bulletins move on and the papers become tomorrow’s fish and chip wrappings, we’re left with the stark reminder that, if companies are to protect and retain their standing as good corporate citizens, the days of rewarding recalcitrants are well and truly over.

Or at least they should be.

If you’re not familiar with the details of the Orica explosion, I’ll recap briefly…
Continue reading

Bullying at the boardroom table

When we experience or learn about bullying around the boardroom table, we’re often taken aback, shocked and disbelieving.

Surely, we rationalise, these are intelligent adults, eminently capable of conducting themselves in a manner that’s well above that of the schoolyard tyrant? And surely they appreciate that bullying is simply not on, that it breaks just about every workplace health and safety regulation?

The harsh reality, though, is that boards and boardrooms, just like everything else in our world, are pretty much a microcosm of life in general, filled with a cross section of people.
Continue reading

Challengers, Not Critics, Welcome!

You’ll remember my two previous blogs on governance in politics shed some light on pollies failing to live by the very laws they create and their rather flawed approach to board appointments.

Now, in bringing the three-part series to a close, we’ll look at what some serious governance research has to say about the behaviour of those involved in governance and how it impacts – positively or negatively – on the organisations in question.
Continue reading