Boardroom culture picture

When it comes to bad boardroom behaviour, most experienced directors have war stories etched into their memories. Sharon Warburton FAICD, a director at Wesfarmers, Worley and Gold Road Resources, recalls seeing a ranting chair in full flight, and the muted reaction of directors around the table.

“There has been a time when I have seen a full-on rant with thumping of the table and shouting, standing up, walking around and some really aggressive language towards a couple of directors or towards executives,” she said.

“And what I have seen is all the other directors kind of hang their heads, and pick up their pens. That’s where you see silence. As opposed to (having) the courage to call a stop to it or to actually call out the ranting behaviour as being inappropriate.”

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Warburton was one of four directors interviewed for the webinar Dealing with toxic boards, the second session in the AICD’s six-part Boardroom Behaviours webinar series, presented by psychologist Rob Newman.

Naomi Edwards FAICD, chair of Tasplan Super, and a director on the boards of the AICD and Nikko Asset Management Group, also reflected on her own experiences. “I was once on a board with a gentleman who was quite grumpy. He was very negative and he would criticise publicly what the managing director was bringing to the board. He was not a man of bad intent. He just had a negative outlook on the world. But what it meant was that the board became quite chilled by this and we spent a lot of time kind of pussyfooting around him and trying to politely rein him in at meetings. I noticed that it wasted a huge amount of time for the managing director and she was actually quite intimidated.”

Jayne Drinkwater GAICD, Deputy Chair at Greater Bank, director at Hunter Water and CBHS Corporate Health, added that she had also experienced directors who dominate discussion and ask for too much detail. “I have worked with directors who clearly believe that their view is always the best. And that the rest of us just need to be enlightened. “As directors we need to remember that our colleagues have a right to share their perspectives too.”

Director behaviour creates boardroom dynamics, which drives board culture

Boardroom psychologist Rob Newman, who teaches the AICD’s Boardroom Mastery course, believes poor board dynamics such as groupthink or a climate of distrust and conflict are often a cumulative outcome of unaddressed bad behaviours of individual directors. “A bad behaviour such as dominating by the chair triggers a reaction such as anxiety or silence in other directors, and when this reciprocating pattern repeats over time, a habit is formed in the group which leeches into and shapes boardroom culture. “But if you catch bad behavior early, then you can prevent it from becoming a habitual boardroom dynamic that affects group discussion and decision-making.”

When to speak up

Newman identifies six early warning signs that it is time to speak up and intervene. These indicate that bad behaviour patterns have gone beyond social inappropriateness, to negatively impact board effectiveness.

  1. Corrosive relationships – directors don’t like each other
  2. Emotionally exhausting discussions – meetings are hard work
  3. Board becomes less talkative – people are beginning to withdraw
  4. Directors avoid uncomfortable topics – fear of offence and conflict
  5. Directors retreat to their expertise – unwilling to comment on other topics
  6. Coalitions and alliances form – because directors lack influence as individuals

The consequence over time of poor board dynamics is the creation of dysfunctional boardroom cultures. These can manifest as silence in the boardroom, where directors do not speak up when they disagree with the views or behaviour of colleagues, or withdraw when topics are contentious or discussion becomes uncomfortable. They can also manifest as corrosive climates of mistrust and competition, where the focus is on egos, not issues, where real contributions are inhibited, trust and relations eroded and commitment and board solidarity lost.

Three strategies to deal with disruptive behaviour

When dealing with difficult behaviour, directors should calm their bodily physiology first, says Newman. By slowing and deepening your breathing, you lower your heart rate, and reduce your tension. By focusing your thoughts on what you specifically want to achieve in this situation, you also calm your mind. “It is hard to have a knee-jerk reaction when you are calm and focused,” he says. “Only then you can be considered and strategic about how you address the behaviour.”

While chair interventions and team building techniques can help, at an individual level there are three approaches a director can take to address bad behavior, he says. A light touch approach is for directors to suggest ground rules to shape behavior. A more direct approach would be to give offline feedback to the offender, and perhaps most confronting is to publicly “call out” the bad behaviour.

  1. Suggest ground rules

    When an issue is contentious and likely to create division or competition for talking time:
    • Ensure everyone has a chance to speak
    • Apply formal voting rules
    • Aim for consensus, settle for majority

    For example: “This is a complex topic and I’d really like to hear the full range of perspectives on it – how about we hear a brief of each director’s view and then see if a consensus emerges? All ok with that? Good, who’d like to start?”

  2. Offline peer feedback

    When an incident has occurred and you want to counsel your colleague:

    1. Specify the behaviour
    2. Speculate on its purpose
    3. Identify negative consequences
    4. Seek the other person’s perspective
    5. Suggest a more functional alternative

    For example, in a one-on-one conversation after a director is publicly critical of a colleague, “John I think that was a harsh thing you said to Sue (1). I understand that you have a very different view from her on this issue and that you want to advocate that strongly to the board (2) but by attacking her you might actually diminish your influence with members of the group (3). What your thoughts on this (4)? (Listen). Well, you would definitely be more influential with me if you focus on the facts at hand rather than put down the person (5).” This allows the colleague to correct their own behaviour by hearing the impact of it on others.

  3. Calling out bad behaviour

    When an incident has occurred and you want to call-out your colleague:

    1. Socialise your intentions prior (optional)
    2. Specify the unacceptable behaviour
    3. Identify how it impacts you
    4. Seek others’ thoughts

    For example, talk to fellow directors offline about your colleagues’ pattern of bad behaviour, the impact on you and the fact that you want to do something about it. Get their thoughts on this (1). When the behaviour arises again, publicly state, “John I think that your tone of voice and words are a personal attack on Sue (2). I find it unacceptable to behave like that with fellow directors (3). How do others feel about this? (4).” This makes the behaviour a topic for board discussion and allows the group to reiterate behavioural expectations and norms.

    James Beck GAICD, Managing Director of Effective Governance, who was a co-host with Newman on the webinar, says the first thing boards should do before any situation occurs is to take the time to agree ground rules or procedures to invoke when conflict does arise. “One such example would be the right for any director to call an in-camera session at any point in time,” he said. “If you were one of the directors feeling blindsided, you could stop the process and call for an in-camera session.”

    Similarly, psychology consultant and executive coach, Jane Holzworth, who also co-hosted the webinar, says that in situations where oppositional directors may indicate from their body language or facial expressions that they disagree with discussions or decisions, the best tactic is to pull them into the discussion.

    “To engage these people before their frustration spills out as bad behaviour, you could ask them questions. You could say: ‘I've noticed you seem to be thinking intently right now, would you like to share your thoughts? I really want to hear what you think’. In that way, I would encourage them to participate in the discussion, rather than let them brood and blow up later.”

    On a final note, Newman adds, “It is important to remember that despite any bad behaviours, most directors have good intentions. They are typically earnest and diligent people trying to do a good job, but people who have become frustrated or angry or reticent when things don’t go the way they’d like. To deal effectively with such colleagues, we should keep in mind their good intentions and admirable qualities, while at the same time being specific and clear in sanctioning unacceptable behaviour. That is, we should be both respectful and truthful when confronting bad behaviour – a combination that requires both calm and good planning.”

Boardroom Behaviours: Six-part webinar series

In this six-part webinar series, Rob Newman and his guest directors will explore the causes of dysfunctional boardroom behaviours and use psychology to better understand board dynamics. The skills and strategies covered in each session will be of benefit to all directors. Participants can attend live or access the recordings. Register for individual sessions using the links below.

Positively influencing peer behaviours

Wednesday 10 February 2020

All directors are responsible and capable of doing something when board effectiveness is compromised. Explore how group dynamics operate in boardrooms and how to positively influence peer behaviours.

Interventions for fractured and dysfunctional relationships

Wednesday 10 March 2020

When board relations have broken down to the point of animosity, you know you have a problem. Before you call in the experts, learn key strategies that boards can use to restore relations and get back on track to being a functional group.

Board culture in action

Wednesday 24 March 2020

Regulators and royal commissions alike have pointed to boardroom culture as the key factor driving most governance failures. But what do we really know about culture in Australian boardrooms? Let our organisational psychologists and experienced company directors show you.

Silence and aggression in the boardroom webinar recording

Ineffective meetings all look the same. Some directors compete for dominance, while others go to silence and withdraw. Using a live case study, our organisational psychologists explain why and explore what can be done about it.

Dealing with emotionally toxic boards webinar recording

How should you deal with continuously, palpably tense board meetings in which relationships are highly abrasive? Understand why people derail and what techniques you can use to step up, not step down