Difficult conversations in the boardroom

Robust discussions are part and parcel of being a director. Directors are charged with asking difficult questions, challenging key assumptions and testing each other’s ideas in order to arrive at the best decision for their organisation. Indeed, a failure to question and critique might amount to a breach of directors’ duties and may threaten good governance.

But when can probing questions and frank discussion go too far, crossing the line between professional disagreement and bullying?

In Adamson [2017] FWC 1976, the chair of the governing board of some of South Australia’s remote Aboriginal lands, Anangu Pitjantjatjara Yankunytjatjara Inc., brought claims of bullying to the Commission against the corporation’s general manager and deputy chairman.

The chairman alleged that they refused to deal with him, interfered with the conduct of board meetings, frustrated the obtaining of a quorum at board meetings, denied access to board minutes, and made “defamatory” statements during board meetings.

While the Commissioner dismissed the application – the claimant had not been re-elected chairman and so was not at “future risk” of being bullied at work – it decided that he was in fact a “worker” and that activities undertaken by directors in performing their duties are “work”, within the meaning of the bullying legislation.

Michael Byrnes, workplace relations special counsel at Clayton Utz, says that this decision now brings directors within the Commission’s stop-bullying jurisdiction and would allow for claims between directors, and between directors and executives.

“[The Commission] decided that he was in fact a “worker” and that activities undertaken by directors in performing their duties are “work”.”

“While the Commission does not have the ability to make monetary orders, it may limit or regulate a person’s behaviour,” Byrnes says. “This might mean having no direct contact with the director who has brought the claim or only having contact through an intermediary – consequences which will obviously impact one’s capacity to carry out one’s duties as a director.”

Reputational damage – for the individual and the company as a whole – are also real risks of which directors need to be aware.

It is important to note that mere disagreement of opinion, personality differences, and difficult discussions do not constitute bullying.

“There is no place for bullying in the boardroom – or anywhere for that matter,” says Graham Bradley AM FAICD chairman of HSBC Australia. “But boards should certainly not feel inhibited to ask constructive, probing questions in a courteous and respectful way. This shouldn’t be confused with bullying,” Bradley adds.

Cheryl Cartwright GAICD, board member of the Civil Aviation Safety Authority agrees. “It’s a weak board which is afraid to question each other and management. Boards aren’t about confrontation, but are about all voices being heard.”

5 ways to manage difficult discussions and mitigate against bullying behaviour

1. Create a culture of courtesy and respect

“Directors should work collaboratively to create a culture of courtesy and respect in the boardroom in the first instance. This should be the hallmark of all discussions,” says Bradley.

Individual directors should lead by example, not only for their fellow directors but for the rest of the organisation.

2. Refresh understanding of codes of conduct and other boardroom protocols

“Directors should use the organisation’s codes of conduct as a guide for all boardroom interactions so that robust decision-making processes can be conducted in a civil and collegiate way,” says Byrnes.

Boardroom protocols and processes help to set expectations among all directors so that there are no disagreements about what constitutes best practice from the outset.

3. Look at negotiation and communication skills as areas for professional development

“Coaching for both directors who are not afraid of confrontation, and those directors who are, can really help with boardroom dynamics and how discussions play out,” Cartwright says.

Taking the time to build confidence and develop ‘soft skills’ in communication and negotiation is important. An effective director is a team player and is able to balance these skills along with their own areas of expertise in a variety of boardroom scenarios.

4. Apply common sense

Make sure discussions focus on ideas and proposals, rather than personalities or individual motivations.

Directors cannot fulfil their statutory functions if they fear their fellow directors. They cannot make decent decisions and are unable to contribute to board discussions. Bullying behaviour shuts down a board and causes the organisation to suffer.

5. Use techniques commonly used by chairs

“The chair’s role is critical in stopping any potential bullying behaviour in its tracks,” says Cartwright. “That is what they are there to do.”

An experienced chair will often employ any number of techniques when discussions get too heated in the boardroom. “This includes changing the subject, introducing a little humour to lighten up proceedings, or, if necessary, taking a break and reconvening when all directors agree to start the conversation on a new note,” explains Bradley.