Constructive Challenge in the Boardroom

One of our duties as board directors is to challenge management. Some directors find it hard to challenge because they don’t want to offend. Others are eager to challenge but end up leaving resentment and hard feelings behind.

How can we find a balance so we can fulfill our duty and yet still maintain a positive relationship with management?

The answer is constructive challenge — the practice of asking questions in board and committee meetings with the purpose of providing scrutiny, putting an idea to the test, or assuring decision-making.

Constructive challenge is a concept and practice that cuts to the quick of the fundamental purpose of boards. It is also vital to helping build relationships and creating positive group dynamics. — Daniel Taylor

Constructive challenge is an important aspect of effective board governance. It encourages open and honest discussion and debate, promotes accountability, and ultimately leads to better decision-making and improved outcomes for the organization.

What is Constructive Challenge?

For board directors, challenge is part of the job description. When management puts forward a proposal or recommends a decision, board directors are expected to challenge them. What does it mean to challenge in that context?

The Oxford definition of challenge is “an objection or query as to the truth of something, often with an implicit demand for proof.” When viewed that way, a director’s challenge to management could convey skepticism, doubt, and even a lack of trust. It may be perceived by the person being challenged as embarrassing or even ego-threatening, adding to any insecurities they already have.

Where the term “challenge” on its own might seem harsh, it’s softened by inserting the word “constructive” ahead of it. Oxford defines constructive as “serving a useful purpose; tending to build up.” The concept may be familiar because, in our working lives, most of us learn to deliver “constructive criticism” or “constructive feedback” to employees, students, or colleagues. The word implies an emphasis on learning and improvement.

Constructive challenge, then, is a process where people question and examine proposals, plans, and decisions in a way that encourages thoughtful discussion and debate. The goal of the exercise isn’t to undermine or criticize, but to ensure that the best possible decisions are made.

In board work, constructive challenging describes a particular kind of group dynamic and interaction between board members and management. It’s the act of asking penetrating questions in an effort to clarify positions or reveal gaps in understanding without causing offense.

Constructive challenge is essential to board effectiveness across all sectors because:

• It supports robust decision-making. Because constructive challenge encourages thoughtful discussion and debate, board members can identify potential issues and concerns early on, leading to better decision-making in the long run.
• It creates an environment where dissenting opinions are encouraged and valued. When board members feel comfortable challenging assumptions and proposing alternative approaches, they’re more likely to engage in open and honest discussion and debate.
• It helps hold management accountable for delivering results. By challenging management in a constructive and collaborative way, directors can help ensure that they’re focused on achieving the organization's goals and objectives with whatever they’ve put forward.

Constructive Challenge and The Savvy Director

Constructive challenge in the boardroom is closely related to three of the Six Key Habits of the Savvy Director – Ask Great Questions, Collaborate with Others, and Think Independently.

Constructive Challenge and Asking Great Questions. What constructive challenge really boils down to is the art of asking questions — the right questions, in the right way, at the right time. When directors ask great questions, they’re able to challenge assumptions, explore alternative approaches, and identify where more information may be needed. This can lead to a more thorough and comprehensive understanding of a management proposal under consideration or a decision that needs to be made.

Constructive Challenge and Collaborating with Others. Both challenge and collaboration are necessary to ensure that the board makes the best decisions possible. Constructive challenge can actually enhance collaboration by encouraging open and honest discussion. At the same time, collaboration mitigates the potential conflict that can occur when directors challenge management. When everyone is working together towards a common goal, management is more likely to view constructive challenge from the board as a way to improve decision-making rather than as a personal attack.

Constructive Challenge and Independent Thinking. Constructive challenge is a fundamental component of critical thinking — the process of analyzing, evaluating, and synthesizing information to form a judgment or decision. Constructive challenge is a thinking tool that helps you gain clarity about an issue. As with independent thinking in general, constructive challenge requires an open-minded and questioning approach that’s essential to effective board governance.

True constructive challenge rests on psychological safety in the boardroom — the shared belief and understanding that no one will be punished, criticized, or marginalized through challenges to the status quo.

As directors, we can model the behaviour that helps create and sustain an environment of psychological safety. When we admit to our own uncertainties or missteps, we encourage others to do the same. When we seek out and listen to dissenting voices, we encourage truth-telling. When we welcome criticism without becoming defensive, we reinforce the constructive aspect of constructive challenge.

Barriers to Constructive Challenge

I’ve often been asked to provide Constructive Challenge or been in situations where it is being encouraged. It’s an easy little phrase to say, but so hard to do well. It sort of conjures this ideal of a couple of insightful, wise, well chosen, firm but balanced remarks that challenge the status quo but leave everyone feeling better and wiser. — Dan Mikulskis.

Even in an environment of psychological safety, constructively challenging management can be a delicate process. As directors, we tend to accept that constructive challenge is a good thing in theory, but practicing it is a different matter. Here are some of the barriers you can expect to encounter:

• Lack of subject matter expertise. If you’re not familiar with the subject matter, you’ll be tempted to accept information at face value without challenging it. Build up your knowledge and understanding with courses and reading.
• Lack of confidence. When you’re suffering from imposter syndrome, it’s hard to challenge anyone, constructively or not. Work on developing your confidence with tips from our blog post Boardroom Imposters.
• Conflict aversion. Stemming from a desire for acceptance, many directors find conflict — even constructive conflict — uncomfortable and try to avoid it consciously or unconsciously
• Power dynamics. Imbalances in power and authority can make healthy debate between management and board directors difficult. For management, deference to the board’s authority can feel safer than standing up to a challenge.
• Affinity bias. Ingroups and cliques can form between some directors and members of the management team. Loyalty to your group can supersede neutral analysis or critical thinking.
• Complacency. Inertia, lack of imagination, and over-reliance on past successes make us less eager to engage in constructive challenge.
• Expediency. Challenge slows things down. It can sometimes get suppressed or delayed in service of speed over decision quality.

What a Savvy Director Can Do

First of all, work at becoming a role model in your words and actions. Demonstrate your commitment by being receptive to challenge yourself. Practice the behaviour you hope to inspire with the following tips.

• Signal an openness to changing your perspective through discussion and debate.
• Invite others to challenge your viewpoint and assumptions.
• Allow your own beliefs and expertise to be subjected to scrutiny.
• Ignore your instinct to protect your ego by throwing up barriers and acting defensive.
• Acknowledge your blind spots and limitations.
• Thank your colleagues for expressing valid critiques of your stance.

Secondly, make a habit of constructively challenging management when they bring forward a proposal or recommend a decision. Practice the following do’s and don’ts and it will become easier over time.

Do’s:

• Do your homework. Come prepared to board meetings with an understanding of the issues and proposals on the agenda. Have some idea of what questions and challenges you want to put forward. Think about how you will put a constructive spin on your challenges.
• Understand the psychology. Ego, identity, and beliefs are often bound up in the work management has produced. That’s why challenging their work can trigger a sense that you’re criticizing their identity or deeply held beliefs, even though that’s the furthest thing from your mind. If they’re already insecure, make sure to emphasize the constructive part of the challenge.
• Focus on the issue, not the person. Avoid making personal attacks or criticisms. Instead focus your questions on the issue at hand and the substance of the proposal or decision. Depersonalize the issue — don’t frame it in terms of your idea vs. my idea.
• Start with a positive tone. Begin the conversation by acknowledging the hard work and effort that management has put into their proposal.
• Ask open-ended questions. Open-ended questions posed in a non-confrontational and non-judgmental way encourage thoughtful discussion, help uncover information, clarify assumptions, and identify potential concerns.
• Listen actively. Pay attention and really listen to management’s responses and ideas. Be open to changing your perspective based on what you hear. Active listening helps build trust and leads to more respectful and productive relationships.
• Offer alternative approaches. Rather than just dismissing the original proposal, share your ideas and suggestions in a constructive way that encourages discussion.

Don'ts:

• Don't be combative. Avoid being confrontational or argumentative. Instead focus on building a positive and collaborative environment for discussion.
• Don't make assumptions. Take the time to gather all the facts and information before drawing conclusions.
• Don't micromanage. Trust management to do their job. Avoid getting too far into the details of operations.
• Don't rush to judgment. Take the time to consider all perspectives and potential outcomes before making a decision.
• Don't lose sight of the big picture. Keep the organization's goals and objectives in mind and ensure that your challenges are aligned with those goals.

Your takeaways:

• When management puts forward a proposal or recommends a decision, board directors are expected to challenge them.
• It’s important for both directors and management to understand that constructive challenge isn’t about lack of trust, it's about fostering consensus and shared accountability.
• Constructive challenge draws upon your skills in asking questions, collaborating with others, and thinking independently.
• Challenging management without giving offense can be tricky. Even in an atmosphere of psychological safety, there are barriers to overcome, especially conflict aversion and group dynamics.
• Model the behaviour you want to inspire by inviting criticism and being open to changing your mind.
• Remember the do’s and don’ts of effective constructive challenge.
• For examples of effective constructive challenge questions, refer to Constructive Ways to Challenge by Leisa Molloy.

Resources:

• Asking the right questions: why constructive challenge is key to board effectiveness. Daniel Taylor. Good Governance. June 2021.
• Two Lessons Learnt in Pursuit of Constructive Challenge. Dan Mikulskis. Real Returns. December 2019.
• Challenge with Respect – Promote Constructive Dissent. Steve Gaskell. LinkedIn. March 2024.
• Boardroom Diplomacy: Mastering the Art of Difficult Conversations. Lana Dargan and Mallory Bucher. NACD. July 2024.
• Constructive Ways to Challenge. Leisa Molloy. © 2021 www.leisamolloy.com.

Thank you.

Scott

Scott Baldwin is a certified corporate director (ICD.D) and co-founder of DirectorPrep.com – an online membership with practical tools for board directors who choose a growth mindset.

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