Dealing with Difficult Directors in your Boardroom

Difficult Directors

 

The most effective directors are prepared to challenge, probe and speak their minds but this can sometimes cross the line into bombastic, rude or disparaging behaviour. Difficult directors disrupt boards in every sector – but do not-for-profit (NFP) organisations have more than their fair share?

 

“If we take ‘difficult’ to mean having an oversized ego and focusing more on themselves and their goals than the best interests of stakeholders then I’d be inclined to say that they do,” says Warwick Peel, Chief Executive Officer (CEO) of Startup Boardroom.

 

Directors on NFP boards are rarely paid, but volunteering does not excuse bad behaviour.

 

“Even on paid boards I don’t think most directors are motivated by money – and I certainly wouldn’t expect them to be more courteous and respectful because they’re collecting a salary,” says Doug Kimberley, chairman of integratedliving Australia.

 

NFP directors work hard in a challenging environment and it helps to have a passion for the cause. But too much passion can be a problem in itself.

 

“Some directors may have personal experience of the cause – for example, a family member with a disability or in need of aged care – and assume that this gives their opinion more weight,” says Kimberley.

 

Others are on a mission to right a wrong.

 

“This can be detrimental if a very focused director is allowed to dominate board meetings and limit broader strategic discussions,” says Patrick Herd, Principal Consultant at Community Business Australia. “Problems can also arise where directors have held the role for 20 or 30 years and are still attached to what I describe as ‘the old ways’. They yearn to be back in the simpler times of reliable government funding without competition for their services.”

 

But, sometimes, difficult behaviour reflects nothing more than a poor fit.

 

“NFPs must balance the mission of the organisation with business realities,” Herd continues. “Some directors focus too intently on business while others live entirely in the heart space to the detriment of the organisation’s sustainability. Finding the right balance is always a challenge.”

 

A move to greater professionalism

Overall, NFP boards are becoming more professional with an appropriate balance of skills and experience. But there are still pockets of outdated thinking.

 

“These are typically – though not always – small stand-alone boards in rural or regional areas,” says Michael Goldsworthy, Principal Consultant at Australian Strategic Services.

 

He dismisses the excuse that it’s hard to find good, qualified directors outside of the major cities.

 

“In my opinion the problem is a reflection of poor succession planning,” he says. “Mature directors are often looking for people with the level of experience they have acquired rather than the capacity to gain experience, as they did themselves. As custodians of the organisation, it’s their responsibility to maintain its sustainability by encouraging diversity and passing on their wisdom and knowledge to the next generation.”

 

An extensive impact

Rude, overbearing and belittling behaviour from even one director can lead to serious dysfunction.

 

“If directors are to make the most of the limited time they spend together as a board they must work in a collegial way,” says Herd. “Constant disagreement can hamper decision-making and frustrate the CEO. The impact can then cascade down through the organisation.”

 

Agreement achieved by bullying is equally destructive.

 

“The whole board can end up falling in behind a very strong and intimidating leader,” says Goldsworthy. “Or, if there are a couple of like-minded allies, the board can be split in two, which means that any vote is essentially meaningless.”

 

Early intervention

There’s a temptation to do nothing about bad behaviour in the hope that it will improve over time. In fact, the problem is more likely to escalate, and ignoring it could give other directors the message that this is the way things are done.

 

“If you’re unlucky enough to join a board with a difficult director, it is your duty to raise the issue with the chair,” says Kimberley. “It is the role of the chair to make sure that the board is working effectively.”

 

Regular performance reviews can help to identify bad behaviour before it becomes corrosive.

 

“We recommend that directors review their performance on an annual basis,” says Herd. “There are several tools that can uncover areas in need of improvement and help the chair or an independent facilitator to resolve these issues.”

 

However, some boards would prefer to keep the issues under wraps.

 

“They might have a tacit agreement to cover up a serious problem if there’s a chance that exposure would damage their career or their reputation,” says Goldsworthy. “In this case, it might take a new CEO to initiate change, or a crisis such as a government audit inquiry or the threat of litigation to shake everyone up.”

 

Keeping an open mind

It’s not easy to convince someone that their behaviour needs to change.

 

“An informal one-on-one discussion in a non-threatening environment is usually the best place to start,” says Herd. “This will be most effective if the chair can refer to an agreed process, such as a code of conduct signed by all directors.”

 

The whole board should bear in mind that there could be more to bad behaviour than an inflated ego.

 

“A difficult director might have underlying issues such as poor mental health, stress or illness,” says Peel. “The challenge is to remove the shield and get to the heart of the human. But, if it really isn’t possible realign their focus towards the organisation’s best interests, they need to be managed out.”

 

Where possible, directors should have the opportunity to step down with their dignity intact.

 

“I’ve found that, if you approach a person in a respectful and professional way, you can generally lead them to the conclusion you want,” says Herd.

 

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The right qualities

The best solution is, of course, prevention.

 

“Problems are more likely to arise when directors aren’t properly briefed before they’re appointed,” says Kimberley. “Every board should prepare a position description which makes it very clear that a director’s role is governance, not trying to run the organisation. It should also spell out what is expected in terms of courtesy, fairness and respect.”

 

Goldsworthy believes that the recruitment process should take personality into account.

 

“It’s very common to include some form of personality assessment in evaluating a potential CEO but extremely rare at board level,” he says. “This is disappointing because there’s a great deal of research and evidence to indicate that the mix of personality types will be a major determinant of the functionality of the board.”

 

Peel agrees that a rigorous selection process is critical.

 

“You need to unwrap a candidate’s true motivation for wanting the role, why they believe in the organisation’s purpose and what has driven them to seek involvement,” he says. “In today’s fast-moving NFP environment you also need to assess whether a candidate can adapt to change and navigate uncertainty.”

 

It’s also important for directors to make a careful assessment of a board before they join.

 

“The most effective NFPs are expanding, growing and delivering solutions to significant social challenges,” says Herd. “I encourage professionals with relevant skills to consider the contribution they could make on an NFP board – but I also recommend doing careful due diligence to ensure the board is functional, collegial and focused on the mission.”

 

Staying informed

Sound succession planning, the right policies and procedures and a professional recruitment process can all help to filter out difficult directors. If a badly-behaved director is already on the board the situation is unlikely to improve without fast and appropriate action. Expert intervention may be required where an informal chat has no effect. And, if all else fails, the director must be removed. But the culture of the board is the sum of the individuals’ attitudes, behaviours and work practices and it is up to directors to stay informed about their duties and responsibilities to all stakeholders as well as each other.

 

Want more practical advice for dealing with difficult directors? You might be interested in purchasing a copy of our Dealing with Deviant Directors webinar recording, available here.

 

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Domini Stuart About Domini Stuart

Domini contributes regularly to Company Director, [email protected] and NAB’s online business, health and agriculture magazines and has written about health for publications including My Business magazine, the Sunday Telegraph and Wellbeing. She is also an editor, author and speaker.

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