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Fixing a Dysfunctional Board

Jan 08, 2023

 

Your board work should be an enjoyable experience, especially if you like dealing with interesting, complex issues where the best way forward is often difficult to discern. At their best, your board meetings should be intellectually stimulating, engaging, and rewarding – a place where you have the opportunity to exchange views with people you respect and dig down into all sorts of fascinating data.

Then why are so many board meetings boring? And why are so many board directors frustrated, disengaged, and unhappy?

Maybe it’s the nature of the board. Maybe it’s dysfunctional.

How do you know? And what can you do about it?

 

Why it’s important to fix board dysfunction

A well functioning board can help an organization deliver on its vision and mission. When boards work well, they help organizations focus, strengthen their work, reinforce values, and provide advice, energy, resources, and inspiration.

But when boards don’t work well, they can kill the organization’s momentum. Dysfunctional boards can create distorted power dynamics, waste precious resources, and land on approaches that don’t reflect what’s needed and wanted. They’re unable to create clarity around their direction and priorities and can’t align directors around common goals.

 

The Four-Domain Framework

One way to think about board dysfunction is to group dysfunctional behavior into categories. In the article How to Spot the Top Indicators of Board of Directors’ Dysfunction, Jeff Arnold describes a four-domain framework for understanding board function or dysfunction.

The four domains are:

  1. Structural. Processes, procedures, systems, board size, and composition.
  2. Strategic. Clarity of direction, and the ability to be purpose-driven and future-focused.
  3. Cultural. How the board works as a team (or doesn’t).
  4. Individual. How individual directors show up and contribute.

The first two domains center on process and the latter two on people. With that is mind, let’s start by delving into the two process-centered domains – structural and strategic. In our next Savvy Director blog, we’ll dive into people-centered board dysfunction. 

 

Structural Dysfunction

A board is structurally healthy when it has the right size and composition for effective decision-making, a clear understanding of what it does and how it works, robust programs that help directors perform their duties, and sound methods for continuous improvement.

On the other hand, there are many ways that board structure can contribute to dysfunction. Here are just a few symptoms.

Governance outweighs results. When you notice that staff need to invest an inordinate amount of time supporting the board’s requirements, it might give you a clue that the formalities of board governance have become more important than what actually gets done. This kind of extreme focus on documentation and formal process can hinder the board’s flexibility and agility, and prevent it from making timely decisions.

Lack of diversity of thought. This isn’t just about gender or racial diversity, but about directors with a broad range of personal and professional experience that leads them to have a rich variety of viewpoints, thinking styles, and ways of expressing themselves. If everyone on your board looks the same, talks the same, and shares the same opinions – you’ve got a problem.

Unclear authority. When it’s unclear who gets to make a decision — or whether a decision even needs to be made — conversations can meander all over the place or become needlessly contentious. If no one knows whether something is supposed to be a board decision, a committee decision, or is actually the purview of the CEO, mistrust and misunderstandings are bound to occur.

Lack of self-awareness. Without evaluation, it’s impossible for the board to learn and grow. This takes more than a casual in camera conversation about how things are going - it requires a rigorous assessment process. Similarly, if the CEO isn’t assessed, or the assessment is done poorly, or shrouded in secrecy, performance improvement is unlikely.

 

Strategic Dysfunction

Indicators the board is healthy in the strategic domain include clear direction, purpose and values that act as guideposts for decision-making, a focus on strategy at every board meeting, and a big picture view of the organization and its environment.

Here are a few symptoms of strategic dysfunction:

Forgetting about purpose. Sometimes, with its necessary focus on factors like size, cost, or competitive position, the board seems to forget that the organization is there to serve a purpose. It’s a bad sign if the board never discusses the goals that the organization is looking to achieve and the impact it is having.

Micromanagement. If board members start to act like part of the management team, getting involved in day-to-day operations, it can create friction. Management can end up feeling undermined and disempowered.

Inability to respond in a crisis. Sooner or later, every board has to face the prospect of change or upheaval. If directors get spooked by such challenges, or can’t cope with crises, it doesn’t bode well for the long-term success of the organization.

A poor reputation. If the board has a poor standing or low profile in the community, it can be difficult to advance the mission, attract new board members, and garner support. In these days of social media scrutiny, a poor public profile can make carrying out the organization’s work next to impossible.

 

Fixing a dysfunctional board

So, how can a board of directors deal with dysfunction? Obviously, preventing it in the first place is the best course of action. If you notice some of the red flags early on, it shouldn’t be that hard to nip it in the bud.

But once a board becomes truly dysfunctional, turning it around requires immense effort and a great deal of patience. It also takes a lot of time. Think of it this way: It’s not a sprint it’s a marathon.

The type of action the board should consider depends on what the dysfunction is, so the first step is identifying the source. Is it structural or strategic? Or maybe it’s not process-centered at all. It could be a people-centered dysfunction – as mentioned above, we’ll be writing about that in our next Savvy Director blog.

The good news is that addressing issues in one domain often spills over into the others. Here’s just one example of how that can happen: improving board meeting agendas is structural, but it also allows more time for big picture discussions (strategic), encourages more constructive dissent (cultural), and helps address director apathy (individual).

Let’s look at some of the actions a board might consider to address process-centered dysfunction. We’ve written about many of these actions in previous Savvy Director blogs, so we’ve included links where appropriate.

  • Think about the board's size – is it too big and ungainly to carry out its role effectively? If involving the entire board in decisions is unwieldy, that could be a sign your board is too big to engage in meaningful conversation. Consider making the board smaller. On the other hand, your board could be too small. If it’s difficult to populate committees or there’s little in the way of differing viewpoints, consider making your board bigger.
  • If you can’t change the size of the board, think about its structure, especially its committees. Do you have the ones you need? Are they doing their job? Is information flowing appropriately from committees to the full board? Think about putting in place ad hoc committees or task forces to deal with specific issues. Read our blog Getting the Most Out of Committees on this topic.
  • Consider alternate approaches that allow directors to engage in meaningful conversation about purpose and strategy. Board retreats are an ideal way for this to happen. Plus, they have the added benefit of helping the board to address cultural dysfunction by improving teamwork.
  • Conduct regular board evaluations, either through a self-assessment process or with an external party. Most importantly, put in place a process for following through on improvement plans that emerge from the evaluation. Our blogs From Compliance to Improvement and From Evaluation to Action have more on this topic.
  • Put in place an annual CEO performance assessment that’s informed by clear goals and performance indicators. It’s okay if a board committee runs the process, but it’s important that input from all directors is solicited and the results are shared with the full board in an open and transparent manner. Being secretive about it will only contribute to cultural dysfunction.
  • Get your board meeting agendas right – they’re an important tool for effective boards. Ensure that agendas are brief, relevant, and logical. Allocate time to discuss strategy and long term goals rather than operations. Read our blog The Strategic Board Agenda on this topic.
  • Provide directors with the right information before and during meetings to allow the board to make thoughtful decisions. Our blog Deciphering Management Reports has more on this topic.
  • Make sure there are clear terms of reference for the board and its committees. These help clarify roles and keep the board from interfering with day-to-day business.
  • Develop an authority matrix or policy that lays out who is responsible for which decisions. It might seem overly bureaucratic, but it can be incredibly useful to have a clear guide for who decides what.
  • Develop a competency matrix to help in the recruitment and selection of new board members. Make sure to identify what your board needs right now. Read our blog The Right Director for Your Board on this topic.
  • Put in place a strategy for diversity, equity, and inclusion to ensure that, over time, the board’s composition shifts to more closely reflect its stakeholders.
  • Consider putting in place director term limits to ensure a healthy turnover of board members. Our blog When It’s Time To Go has more on this topic.
  • Conduct exit interviews with outgoing board members to find out their reasons for leaving. If there are a lot of members resigning before their terms have expired, there may be serious structural or people problems.
  • Develop a board succession plan for filling board vacancies and developing board leaders. Read our blog A Better Way to Fill Board Seats for more on this topic.
  • Put in place an effective onboarding program for new directors. Our blog Hit the Ground Running has more on this topic.

 

The Savvy Director’s Role

If you’ve spotted some of the warning signs of process-centered dysfunction in your own board, what can you do about it? After all, you’re just one person. You may be dedicated and hard-working, knowledgeable and engaged, but you can’t fix everything yourself.

First of all, if you’ve spotted these symptoms, you can be pretty sure that others have as well. Why not be the person who addresses the elephant in the room to begin an open conversation about the issue? It won’t necessarily be easy, but then again, a lot of board work isn’t easy. Re-read our blog You’re Braver Than You Think to help you screw up your courage if needed.

When it’s the right time for the conversation, try kicking it off with a few pointed questions. They often work better than declarative statements to reduce defensiveness and encourage dialogue.

 

Your takeaways:

  • Dysfunctional boards have trouble defining a clear direction and aligning directors around common goals.
  • It’s helpful to group board dysfunction into process-centered and people-centered domains.
  • A healthy board structure involves having the right size and composition, clarity about roles and responsibilities, support for directors, and a continuous improvement mindset.
  • When it comes to the strategic domain, a healthy board sets a clear direction, is purpose-driven, sees the big picture, and focuses on strategy.
  • It takes a lot of effort, patience, and time to turn around a dysfunctional board, but it's worth it.
  • As an individual director, you can start the conversation about board dysfunction with a few well-placed questions.

 

Resources:

 

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 directors prepare for their board role.

 

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