Bringing Balance Back to the Boardroom?

zip itI read an interesting Harvard Business Review blog post today written by Dr. Thomas J. Saporito, chairman and chief executive officer of RHR International, regarding bringing balance back to the boardroom. More specifically, the post talks about the CEO-board relationship and how, if the company wishes to succeed, the groups must function as a team. The author has identified 3 very important traits that allow boards to create a platform of oversight and support with the CEO. They are judgment, insight and wisdom. From the blog post:

Judgment is that ability to see what is important, what makes a difference and what is practical. When these criteria are applied, discussions can take place in a more logical and rational fashion. For most lead directors, this skill has been developed through years of boardroom meetings. Their eye catches familiar patterns as they unfold and their background of knowledge can guide the conversation to what they know will be useful dialogue.

Insight is that ability to see what is not obvious. A good lead director can dispassionately assess the board/CEO dynamics and incorporate a level of objective clarity into each meeting. A keen knowledge of human psychology gained by continuous observation of boardroom interactions is invaluable in keeping emotions in check and the focus of the discussion on topic.

Wisdom is really the intersection where Insight and Judgment meet. Samuel Johnson said that “Memory is the mother of all wisdom.” But more than just experiences remembered, wisdom in action is taking the vast amount of knowledge gained from the triumphs and failures of the past, analyzing it carefully and then applying the lessons learned to the challenges of the present. This grasp of what has and has not worked before — and more importantly why — can be a tremendous asset in a corporate world where decisions must be made at hyper-speed to counter business conditions that are ever-changing.

I agree with Saporito on the above traits but can’t help but feel that I’d also want a lead director or non-executive chairman to have the following additional traits:

Daring in that the person has a history of risk taking on other boards, or in a leadership role at another company, that have led to both the success and failure of particular plans. There are obvious advantages to bringing in successful board members with a proven track record and you may think that someone who has previously failed in a similar role would not have much to bring to the table. In reality, however, that person knows what doesn’t work and, if they have learned from their mistakes, could add great value to your board and business.

Outspoken about the ideas being presented. The ‘distinguished’ member need not be correct every time they open their mouths but it does the business good to challenge the ideas put forward by others. The last thing you want is someone on the board that is afraid to speak their minds or casually ‘goes with the flow’ on all decisions. There are obvious personality conflicts that might arise if you have too may ‘big idea’ and ‘big talkers’ but that is something that needs to be taken into consideration prior to appointing a member. Too many boards welcome ‘experts’ or well known public figures to their boards without thinking of potential personality conflicts. Though one person could make your board, so true is the reality that the same person could also break your board.

We might be able to file this blog post under the ‘incomplete thought’ category but the primary idea that I’m trying to get across is that an organization needs board members and CEO’s that can work together….amicably. The last thing we need are more board meetings like this…

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