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.
— Governance Matters (@GovernanceMatt) June 26, 2018
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.
The challenge, of course, is to strike the right balance, especially as our experience with board performance evaluations tells us some 90 per cent of directors see collegiality as a significant board strength.
On one level, that’s fantastic as no-one wants a dysfunctional board where everyone hates everyone else. But unbridled friendliness stunts robust debate and promotes consensus, even when there shouldn’t be any.
So how do we reach a happy medium, especially in a world where people are mostly polite and there is a tendency to agree with the majority when you’re the lone differing voice?
Thankfully, we do have a number of strategies at our disposal to circumvent such scenarios – and I will share just three that help to generate debate on issues.
Two of these have been mentioned before in earlier blogs but warrant repeating.
There’s the Devil’s Advocate approach when contentious issues arise. When the chair encourages the board to argue against a cause or position not as a committed opponent but simply for the sake of argument, people suddenly have the freedom to say anything…and sometimes that’s precisely what they are quietly thinking.
You might recall the earlier blog on an extremely wealthy Thai powerbroker and major shareholder in one of the country’s largest retailers. He wanted independent thinkers on his board rather than ‘yes’ members but his stature, coupled with the Thai and company culture, meant everyone agreed with him. That’s when he introduced the De Bono Hats strategy to get people thinking in a completely new and different way.
Finally, make sure that the board conducts regular confidential director performance evaluations where each board member gets to talk about the strengths of the other board members but also areas where improvement can be made. You will often see comments emerging such as ‘this director is very good but doesn’t speak up enough’ or ‘they just agree all the time’.
The common denominator in all three examples is a form of confidentiality. When we feel thoughts are not necessarily being ascribed to us or shared with others, we suddenly enjoy the freedom to say what we really feel.
And the result is a most welcome and refreshing honesty.
Until next time,