The Power of Consensus

Boards make decisions in a variety of ways. Simple majority vote, ranking, scoring, and multiple voting rounds help directors consider options but don’t necessarily get the board to a place of agreement. Consensus decision-making helps a board achieve agreement, even if the decision made is not everyone’s first choice.

Consensus that emerges from discussion involving a diversity of perspectives is a powerful force that tends to lead to good decisions. Once consensus is achieved, directors leave the meeting more satisfied and more likely to support the decision.

But it’s not as easy as it sounds. Reaching consensus requires a skilled board chair and an open, collaborative board culture. Let’s explore how you can contribute to building consensus at your board table.

What Do We Mean by Consensus?

The dictionary defines consensus as "the judgment arrived at by most of those concerned; general agreement.” Consensus is both a journey and a destination. The journey is a process that groups use to resolve issues, make choices, or develop strategies. The destination is a decision that satisfies all participants, even if it’s not each person’s first choice.

In the context of board decision-making, consensus refers to a decision that is acceptable to all board members. Building consensus requires that all voices are heard, that individual concerns are addressed, and that a decision is made that all members can support outside the boardroom.

A consensus decision doesn’t mean that everyone agrees on all the details or that dissenting directors have changed their views or perspectives. Ideally, what it means is mutual understanding, agreement to support a decision, and commitment to a course of action.

Pros and Cons of Consensus vs. Voting

Consensus decision-making has advantages, such as:

• Better decisions. It encourages the laying down of individual preferences for the greater good.
• More inclusion. It gives all directors an opportunity to be heard.
• Increased buy-in. It creates shared ownership and more commitment to the end decision.
• Improved teamwork. It strengthens directors’ commitment to work together and share power.
• Trust and respect. It fosters an environment that places equal value on each director’s ideas.

While it takes longer, these advantages make it better to push for consensus instead of taking a vote in the following situations.

• When making high-stakes decisions with significant consequences.
• When there are many stakeholders and different perspectives.
• When dealing with complex or contentious issues.
• When searching for a creative solution.
• When a long-term perspective is needed, such as in strategic planning.

Nevertheless, consensus decision-making has its disadvantages. It can be difficult to achieve — sometimes one individual with strongly held views can derail the process — making already tense situations even worse. It’s time-consuming when compared to a simple majority vote. And sometimes, when board members become more focused on reaching a decision than on examining the options, it can spark a race to the lowest-common denominator or lead to a compromise that’s less than optimal.

Because of these disadvantages, there are situations where taking a vote is preferable to seeking consensus.

• When time is limited or there’s an emergency.
• When the decision is routine or has limited consequences.
• When legal or regulatory compliance is needed quickly.
• When there’s one solution that’s clear to everyone.
• When needed information is limited or unavailable.
• When consensus is unlikely because directors’ views are polarized.

Setting the Stage for Consensus

The fact of the matter is some boards will have an easier time with building consensus than others. The board’s culture and team dynamics significantly affect the ability to reach consensus. With practice, any board can get better at working together to make solid decisions.

These factors support consensus-building:

• Clear communication and good listening skills result in understanding other perspectives.
• Respect for each other's opinions and expertise lead to stronger collaboration.
• Shared vision and values contribute to agreement on decisions that align with those values.
• Trust among board members creates willingness to work towards a mutually acceptable decision.
• Diverse perspectives and experiences help board members identify potential blind spots and contribute to robust decision-making.

The Board Chair’s Role

The board chair is a pivotal figure when it comes to reaching consensus. It takes emotional intelligence and a solid understanding of the different personalities on the board to deal with obstacles and manage conflict. The chair ensures the environment is safe for people to share their perspectives. They don’t tolerate criticism of someone else’s ideas. They encourage quieter directors to contribute and set boundaries for more vocal members.

Consensus building is a time-consuming process. The chair must exercise patience in allowing directors to work through their concerns and reach an acceptable decision. An effective board chair sets the tone for constructive debate, helps clarify the issues, encourages participation and give-and-take, and summarizes the decision so everyone has a clear understanding.

Usually, the chair acts as facilitator, walking the board through the sometimes laborious consensus-building process. Occasionally a board may engage an external facilitator to provide a neutral perspective and move the discussion along. This allows the chair an opportunity to participate more fully. It tends to happen for high-level topics such as developing strategy, deciding on mergers and acquisitions, or discussing equity, diversity and inclusion.

Building Consensus

The consensus-building process is not identical for every board or in every situation. A flexible approach is needed to suit the culture of the board and the topic under discussion. Still, there are some common steps that help boards get to consensus.

Agree on the decision rules. The first step is agreeing on the path to take. What counts as consensus? Does everyone have to agree enthusiastically or is it okay if some feel a decision is “good enough?” Can one person block consensus? Will a vote be taken at some point? (A vote to formalize the decision may be required under your bylaws.) What happens if consensus can’t be reached even after multiple tries?

Be clear about the issue. Ensure that all directors have a clear understanding of the issue at hand and how it relates to the organization’s goals. When everyone has a different idea of what's being proposed, consensus gathering can turn into lots of people talking past one another.

Encourage discussion and debate. Open discussion is needed to identify issues, clarify questions, establish criteria, and address concerns. Encourage directors to focus on the underlying reasons for their positions rather than simply defending their positions. Don’t allow one or two persons to dominate the discussion. Get everyone to participate. If someone isn’t participating, ask them for their input.

Build on common ground. Focus on shared values or interests. Identifying areas of agreement can help build momentum and create a sense of progress. When all points of view have been shared, find the common ground among the various opinions and use it as a building block.

Generate solutions. Encourage directors to brainstorm potential solutions to address the concerns of all members and arrive at a mutually acceptable decision. This creates a sense of shared ownership and commitment to the final decision.

Place a proposal on the table. Clearly articulate the solution that’s being proposed and the rationale behind it. Ensure that everyone has the same understanding of what’s being proposed.

Test the waters. Check if everyone is on side or if the proposal still needs to be amended in a way that builds agreement without diluting its core purpose. Have each person share their reaction and explain their reasoning. Without this step, some people may have a silent disagreement that derails the process at a later stage.

Confirm the decision: Ensure that all directors have a clear understanding of the decision and its implications and are committed to it. The decision needs to be confirmed either by stating that it has been reached by consensus or by taking a formal vote. Either way, the decision is documented in the minutes.

Advice for the Savvy Director

During the consensus-building process, participate fully in the discussion. Be prepared for some give-and-take. If your ego wants to control the result, try to quiet that voice. Actively listen to other's perspectives with an open mind and express your concerns in a respectful and constructive manner.

If you find yourself disagreeing with a decision that the majority of the board supports, one option is to see if the final decision can be deferred to a later meeting. If it can be, take advantage of the soak time. Review the situation, make sure you understand the rationale for the decision, and seek clarification if needed. You may be able to advocate for change by working with other board members to develop an alternative solution.

If there’s no better alternative, and you’re satisfied that the decision is legally and morally defensible, you have no reason to oppose the decision. Even if it’s not exactly your personal preference, accept it and move on.

If you just can’t live with the board’s decision, there are few options available to you, and they’re all unpleasant. If you feel the decision violates the organization's bylaws or legal obligations, you’ll need legal advice to determine what your options are. Depending on the organization's governance structure, you may be able to appeal the decision to a higher authority, such as the membership or the regulator. These actions will undoubtedly put you at odds with the rest of the board.

Ultimately, if you feel the decision isn’t in the organization’s best interests, you may wish to disassociate yourself from it. If you strongly disagree with a decision and you can’t continue to serve in good conscience, the safest thing to do is to resign from the board.

Your takeaways:

• Consensus refers to a decision that is acceptable to all board members. Everyone may not fully agree, but they feel heard and will support the decision in public.
• Consensus-building can lead to better decisions and a more engaged board, but at times it’s a time-consuming, difficult process.
• The board chair plays a pivotal role in facilitating the path to reaching consensus.
• As a director, your role in consensus-building is to participate in the discussion, listen with an open mind, and express your concerns in a respectful and constructive manner.

Resources:

• Principles of Good Governance: Be Consensus-Oriented. Liga Consulting & Training, LLC. LinkedIn. May 2024.
• A vote for consensus. Julie Garland McLellan. Management Library. September 2023.
• Board Leadership: Reaching consensus. Geraldine R. Dodge Foundation. June 2019.
• A Board Leadership Challenge – How to Arrive at a Consensus. Real Board Solutions. May 2019.
• Consensus. Advisory Cloud.
• Consensus Decision Making for Your Board: 4 Step Process. AMC Governance Solutions.

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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