If an item is seen to be contentious, then discuss beforehand how the matter should be resolved. If it’s not dealt with correctly and sensitively then it can cause a serious director rift, and also result in lack of effective decision-making.
Approaching the meeting with the right tone is essential – the goal should be to establish a collaborative climate where all members are treated with respect and civility.
Passionate advocacy should be balanced with the ability to listen and learn.
Also consider establishing guidelines for discussing contentious points, as this can help avoid unnecessary conflict, animosity or even anarchy.
Difficult issues should also be properly dealt with and failing to do so will cause problems further down the line.
Be prepared to spend adequate time on difficult issues – reaching consensus can’t be rushed. If it takes hours, then it takes hours, it is important to be prepared for that.
And remember, there’s nothing wrong with a strong debate and, in fact, any attempts to stifle or control discussions can backfire and harm the organisation more than a frank and open discussion.
Arguably, the chairman has the greatest impact on board performance. A good chairman is worth their weight in gold: a natural consensual leader, able to manage issues and interests from a range of people.
A good chairman should allow the right information to get to the board, the right level of discussion, and be clever and strong enough to bring it together.
They should not seek to force their own views though – if they do then they’re acting more like management.
A good chairman should also act as a mentor to the company’s chief executive. Particularly in SMEs, if the CEO and chairman work in harmony, complement and support each other, then the organisation is far likelier to perform strongly.
However, this is often not the case when the two clash, resulting in tension and conflict. To help things, a discussion of the respective roles and responsibilities of the chairman and CEO should be addressed in the early stages of a relationship, with clear mutual expectations and regular communication.
It is also a good idea for the CEO and chairman to be truthful with each other, communicate frequently, be forthcoming with bad news as well as the good, socialise, show respect to the other party, be responsive to the other person’s requests and ideas, and avoid competition – celebrating the other person’s accomplishments.
Directors should approach each board meeting with the proper facts and data, from company financials, to market insight, to competitor activity.
Arguing over assumptions, hunches and beliefs not only wastes valuable time, but can also be damaging in the long run to company performance and also to board relationships.
Data is increasingly being used to improve decision-making and, remember, it’s much harder to argue over sound data than assumption.
But by the same token, don’t overload board meetings with raw, interpreted facts and figures, this approach can be very time consuming and frustrating.
It’s also a good idea to establish a standard reporting procedure for presenting board reports and papers.
A key role of the board should be to spend quality time on strategy. It’s surprising how little time is often dedicated to this important task.
Key issues to cover when dealing with strategy are to ensure agreement on basic purpose of the organisation, major goals and core tactics for getting there.
Any disagreements need to be collaboratively worked through. One of the biggest causes of board disagreements is a fundamental disagreement about the overall board strategy.
Clear strategic thought is also a key skill for board members to possess – individuals who have the ability to step outside the organisation and view it objectively.
Boards with strategic thinkers are much less likely to be overwhelmed by operational crises because they can view the current problems in a much more long-term context.
Effectively running a board is not easy by any means, but it is worth investing significant time in learning how processes and relationships can be improved.
A company with a harmonious board will be much more likely to be profitable, and successful.
But despite this, there unfortunately remains too little time dedicated to this important task, and as we all know, the consequences of a boardroom blow up can be severe.
James Beck and Geoffrey Kiel, are among the country’s leading governance experts and authors of the new Thomson Reuters book, Directors at Work: A Practical Guide for Boards. More information is available at www.thomsonreuters.com.au.
Andrew Sadauskas is a former journalist at SmartCompany and a former editor of TechCompany.
