Bridging the (Board) Divide

Many boards have been functioning well these past weeks, but others have become divided over the important issues that are now confronting them.

More than a few Savvy Director readers have described situations where sharp divisions have developed around the board table while dealing with significant decisions arising from the pandemic. These are not just cases where one or two directors disagree with the majority. They are situations where the board is split 60/40 or 50/50 on sensitive, significant and urgent issues.

There are so many issues and questions that have arisen. Some examples are:

• Staff layoffs.
• Executing funding cuts – should cuts be targeted or across the board?
• Whether to proceed with previously approved capital projects - could the money be better spent?
• Charitable donations and community support – yes or no? Doesn’t charity begin at home? And which organizations should be supported?
• Is our company a fundamentally sound business that simply does not have any customers right now?
• Is now the time to allow struggling parts of the operation to shut down, or should we invest to see another day?

I’ve been told that, despite an emphasis on diversity, there is still a certain sameness to board composition. While that makes for easier decision-making in good times, these homogenous groups can get stuck during challenging times. As a result, they are often ill-equipped to deal with conflict.

Boards as a whole and individual directors are not that adept at dealing with difficult issues. How can we work within that reality to make the key decisions that are in the best interests of the organization and its stakeholders?

How can the Savvy Director help bridge the (board) divide?

Directors concerned about their board’s culture can be reassured that their instincts are right. Being nervous in the face of a crisis is a good way to start. It allows us to be well-grounded, set parameters and agree on assumptions.

How might savvy directors approach the situation? What questions could they ask? What role might they play to help the board get to consensus?

I reached out to some outstanding directors and board chairs in the DirectorPrep™ network, to tap into their wisdom and get their sage advice for the benefit of our readers. As we get started, I’d like to express my sincere appreciation to them for sharing their thoughts. Names and organizations will be kept in confidence.

What follows are some of the key points these directors had in common.

Let’s consider the following to begin with …

1. We need to appreciate that sharp division is not a problem. The problem is how to deal with it.
   • Conflicting views are natural and should not only be expected but accepted.
   • Conflict is really a difference of opinion about a decision where people cannot get everything they want.
   • Having to make do with available resources is not a bad thing. It can lead to creativity and innovative thought.
2. Start with the premise that all issues are not the same.
   • What are the real issues when fully fleshed out?
   • What are the parameters within which the decision should be made?
   • Do we have the right questions?
   • How else could we frame the question?
   • The apparent question is never the real question.
3. The key point - Do we have to decide now?
   • Things change quickly.
   • Three-year plans have become six-month plans with ‘just in time’ decision-making.
   • Relying on something similar in the past is risky.
   • How far do we have to go with this decision?
   • Can we do something modest to allow us time to learn? To test? To allow for more certainty?

Boards need not be out front of the pack when there are still so many unknowns.

What can we all agree on?

There has to be unequivocal agreement and understanding that every board member is safe to voice their opinion during times like these. It’s the Chair’s role to model courage and to ensure every voice is heard.

Everyone must agree on their obligations as directors - to do what is in the best interest of the organization at this point in time. That has to be the fundamental position.

During the pandemic, one thing board members seem to agree on is that people’s health and safety is paramount. Putting safety first is non-negotiable.

In terms of preventing a (board) divide, the savvy directors I contacted all agreed that certain up-front steps can help avoid serious board divisions in the face of difficult decisions:

• Early on - set the table in advance of the discussion.
• Articulate and revisit the organization’s core values and purpose. Core values do not change just because there is a crisis.
• Get clarity on the context.
• Articulate what you agree the issues to be - short term, long term.
• Agree on how to approach the problem.
• Agree that the directors involved may see things differently.
• Circle back to get agreement on values statements and the critical factors.

Questions to bridge the divide

We began this dilemma with the premise that there is a divided board. If that’s the case, we can assume that the above necessary first steps did not occur or were not successful. So, how might the savvy director help?

It can be tempting to start with your own position and go from there. But your own values, and what you happen to be dealing with personally, should not inform how the board makes its decision. Putting your own position on the table will automatically limit your ability to objectively consider the positions that others put forward. And your neutrality will be called into question.

Be mindful - once you start putting solutions on the table you become an advocate.

Instead, to bridge the divide and prevent further strain on the board’s culture, you could ask some thoughtful questions that would help move the board toward consensus. You could ask a lot of ‘why do you feel this way?’ type questions, and questions that bring the organization’s mission and values back into focus. Consider the following:

• How does your position align with our guiding principles?
• What are you most concerned about if we take this other path, and why is that? Perhaps we are missing some key elements that you have key insight into?
• How strongly do you feel about your position, and can you give us some sense of what is creating that degree of importance for you?
• Would you see other alternatives working that would not be ideal but would still move us in our chosen direction?

Higher level questions to bridge the divide include:

• What are the key principles that we have agreed to when it comes to making decisions during this period? Could these shed some light on the solution to this impasse?
• How would we like to come out of this period as a board? Because, let’s face it, this pandemic will end and we need to ask ourselves how we want to be remembered as a board and as a business?
• How will our decisions be viewed by our stakeholders or the public at large?
• Do we see ourselves being able to build and grow our brand during this period? And, more importantly, can we build and grow our culture?

Some scenarios

The board directors and chairs I spoke with were forthcoming with suggestions and advice on a variety of scenarios that their boards are currently wrestling with.

People:

• How employers choose to treat employees during the pandemic will cast a long shadow. Boards need to examine their moral compass right at the outset and agree on which way they want it to be pointing.
• People are at the heart of the pandemic. It’s important for boards to listen not only to the CEO, but also to the head of HR.
• If layoffs are necessary, how you handle them has a huge impact on the staff who are left running the business. People will remember more than ever not only what employers did during this period, but how and when they did it.
• Timeliness is more important than ever. Getting outside help with decisions is vitally important.

Funding Cuts:

• An across the board cut may be politically expedient, but it’s very inefficient. Instead, be strategic and support what will sustain the business or sector coming out the other side.
• Support successful and viable organizations that will be again. If an organization was struggling mightily before the pandemic, prune it.

Capital Projects:

• Perform an analysis of any legal obligations of contracts that are already in place.
• Determine what decisions must be made now and what can be deferred until the smoke clears. You will have better data if you are able to wait.
• No margin, no mission. Think longer-term decision and consider the benefit for a sustainable future.

Charitable Donations:

• Consider whether you are looking to fundamentally change what you stand for and believe in. Or are you simply making adjustments to reflect today’s situation?
• You may be shifting support to organizations that are doing critical work to help vulnerable people. But in the long term, your charitable giving will go back to the norm. You still believe in the organizations you’ve supported in the past, but for now they will have to wait.

Your takeaways:

• Come back to first principles. Confirm - is this a decision that has to be made right now?
• Are we asking the right questions?
• Get to clarity on what the real criteria are.
• Ask those in competing positions to evaluate their recommendation against the criteria.
• Avoid trying to blur the real decision by ‘throwing stuff on the table’.
• If something should be closed, it should be closed.
• Take the opportunity to ‘Build Back Better’.
• Don’t count the pennies, count the impact you can make in people’s lives.
• An impasse at the board table can have a positive side. It can allow board members and chairs to observe how people react under pressure, and whether their values are aligned with the organization’s.
• It’s easy to run the business above the line, but when you have to dig deep, you sometimes see people in ways you would not have imagined. There’s value in that.

Leave a comment below to get in on the conversation.

Thank you.
Scott

Scott Baldwin is a certified corporate director (ICD.D) and co-founder of DirectorPrep.com – an online hub with hundreds of guideline questions and resources to help prepare for your next board meeting.

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