How to avoid ‘Succession’-style infighting and power struggles on boards
“When I was a board member of a non-profit organization, I observed a lot of petulance, infighting and unproductive behavior,” wrote Jan Rasmussen, company name withheld. “Do all boards work like this? And if so, why? What are [solutions for] unproductive behavior?”
When I asked about it, depictions of corporate executives in popular culture immediately came to mind successor, HBO’s dark comedy, set to win at this year’s Emmys on Monday, September 12. For those who aren’t avid TV viewers, the show is about a family-run conglomerate whose abusive patriarch and CEO, Logan Roy, is under pressure to step down while his emotionally stunted adult children compete wildly for his place. Hollywood is rarely friendly to boards, however successor select the loyalty tests and sniping in the boardroom. Like Jan, I’ve wondered how often actual board meetings reflect milder versions of the Roy family’s conflicts.
The answer? Sometimes, according to board experts, who say that cheekiness and aggression are certainly not characteristics of Everyone Boards of directors, however, are inevitable when powerful executives are placed in delicate roles and tasked with finding solutions to complex, high-level problems. Minimizing uncomfortable, time-consuming tensions is paramount, especially as directors face renewed pressure to regularly renew boards, bring underrepresented voices, embrace new environmental and social causes, and respond to demands from activist investors. Any of these forces — not to mention the usual turning points around CEO succession or financial and cybersecurity crises — could turn a boardroom into a pressure cooker.
Laurie Yoler, general partner of venture capital firm Playground Global, has served on the boards of more than 25 companies. During that time, she has witnessed board members yelling at each other or having a hostile relationship with a company’s management team. She was also privy to the “board theater” when directors are either too scared of, or in love with, a CEO to ask tough questions. The best boards avoid both extremes, she says, and instead create a trusting environment where productive disagreements are welcomed. That outcome really depends on the CEO, though, says Yoler, a self-proclaimed “governance junkie.”
Similarly, Maggie FitzPatrick, an independent CEO and veteran corporate communications executive, says there’s a wide range of board personalities. but successor‘s acquisition of boards with family members is not far away. “They’re complicated,” she says. “In my experience, power makes people do some interesting things.” She also believes that some drama in the boardroom can be a positive sign of a change in board culture, especially as companies begin to reassign power and privilege across disciplines define.
Here are some tips from Yoler and FitzPatrick on how to create boardroom conditions that foster collaboration and trust while minimizing interpersonal conflict.
– Build a strong foundation. Assemble a diverse group that is professionally trained, ethical and independent, says FitzPatrick, who is a proponent of certification and training courses. Recruiting board members “should be like preparing for a marathon,” she says. “There are things you need to do to condition yourself to be effective in the boardroom, and you need to have some required skills.” Without them, “you run the risk of having people in positions of power who aren’t good at it are prepared”. And from that arises a dysfunction.
– Don’t wait until the annual review meeting. CEOs must immediately correct board members “who have gone rogue.” After an incident, the chair should contact badly behaved members to discuss their behavior and then hold a series of meetings outside of regular board meetings to clear up misunderstandings between board members.
– Make sure the board’s role is clear. Some rigor about board goals “should be evident at every board meeting,” says FitzPatrick. Otherwise, odd dynamics and passive-aggressive behavior could “creep into the boardroom.”
– Ask newbies to identify ineffective processes. CEOs and chairmen need to make it clear that new ideas are welcome, says Yoler. “If the board members have been together for 20 years and then you bring in a newcomer or several newcomers, it’s likely to get weird because the old guard might not be comfortable with the new ideas — or they might embrace it.” That’s up to the chair.
– Go back to face-to-face meetings. One of the benefits of face-to-face interactions is the ability to read the room during open discussions. Since it’s easy for outspoken members to dominate video calls, at the end of each virtual meeting, the chair should seek the opinions of all directors to ensure all voices are heard.
– Explicitly discuss the culture of the board. Boards need time to figure out how to work together in crises and to understand their style of working together, says Yoler. “The question is, have you built trusting relationships between the board members and management around the table so that you can solve any problem together? And if so, how?”
Finally, when board members refuse to behave in a manner conducive to respectful, focused discussion and healthy debate, ask them to resign. However, allow the resigning director to do so with dignity and thank him for his service, says Yoler.
While there’s a place for clever insults and explosive breakups in television scripts, the same cannot be said of American corporations.
“Silicon Valley companies that put engineers on their platform for diversity, racial justice and other issues are when I know the company is actually focused on doing something. Because they can hire a lot of lawyers to send memos around, but when they actually hire engineers in something in Silicon Valley, it means they’re working to solve the problem.”
— Rashad Robinson, president of the racial justice and civil rights advocacy group Color of Change, echoed that Quick response Podcast to discuss his approach to working with big companies like Airbnb and Meta.
On the agenda
👓 Read: Recent statistics on CEO turnover suggest boards are cracking down on underperformers. But researchers at the Stanford Graduate School of Business have also found that boards are still lenient with CEOs who don’t meet expectations — and directors rarely have detailed succession plans.
🎧 Listen: Is the anti-ESG investment movement a legitimate threat to more progressive companies? On the GreenBiz Podcast, Alison Taylor, executive director of Ethical Systems and associate professor at New York University’s Stern School of Business, explains why the irrational new push by right-wing politicians and others could be a “flash in the pan”.
📖 Bookmarks: Here’s a cheat sheet for directors to share with company executives: “Presenting data to the board: 6 tips from the experts.” The experts are high-profile executives who attended this year’s MIT Chief Data Officer and Information Quality Symposium.
Jill Sommersa former commissioner of the Commodity Futures Trading Commission, was appointed Director at FTX US Derivativesa subsidiary of FTX, the crypto exchange under the direction of Sam Bankman-Fried. Vicente ReynAl, Chairman, President and CEO of Ingersoll Rand, joins the Board of Directors of American Airlines. Nintex tapped into it Jeff TeperPresident of Collaborative Apps and Platforms at Microsoft, as a new independent director. Building and facility management company ABM recruited Jim DeVriesCEO of security technology company ADT, on its board of directors. Larry Quinlanformer CIO of Deloitte, has joined software maker Boomi as director. In the United Kingdom, Adriana KaraboutisChief Information and Digital Officer at electricity company National Grid, is now a board member at insurance company Aon.
– According to research firm Equilar, business leaders are starting to focus on other forms of diversity besides gender; The quarterly report shows a slight decline in the proportion of women in US board meetings.
– BlackRock opposes it Directors who sit on too many boards immediately as part of its campaign to improve corporate governance at the companies in which it invests.
– Silicon Valley companies are busy hiring economists, particularly recent Ph.D. Programs to tackle pricing strategy, product development and general business planning.
– Japan’s tech giants link social and environmental goals to executive pay.
– Target dropped its policy requiring CEOs to retire at 65, a move experts see as reflecting a changing attitude towards aging and a measure of stability in uncertain times.
The British monarchy, also known as “The Firm”, has lost its longest-serving leader, a woman who gave the world a master class in managing an institution’s reputation. In this profile of Queen Elizabeth II z That New YorkerRebecca Mead decodes the “incessant display of power without real potency” and her talent for earning the respect of the critics. She writes, “Elizabeth lived a life of privilege and sacrifice, and even those who rejected the former acknowledged the latter.”
Here is a snippet:
“Like all very old people, the Queen got smaller with age: when she appeared on the balcony of Buckingham Palace during her Platinum Anniversary Celebrate, in June 2022 she was a head shorter than her heir, Karl, even in her hat and heels. “As you can see, I can’t move,” she informed visiting officials at Windsor Castle in February 2022, shuffling lightly on her feet, cane in hand, game as usual for the social interactions her role required. The Queen engaged in small talk on a large scale.
but your personality only grew more powerful as her personality faded. Through instinct, constitution, and training, the Queen knew that what was being asked of her was an almost superhuman self-cleavage. She was the hereditary adornment of the nation – as impractical as the crown jewels with which she coronation had been celebrated. At the same time, their way of working was not based on the principle of display, but of concealment. For her own self-preservation, and for the preservation of the institution she embodied and guided, it was often prudent to retreat behind a golden curtain.”
Read the whole article here and a nice weekend.