Part Two of Three Board Attributes
Article Four of a total of seven Attributes Articles
In our previous weeks’ article series, Genius addressed “Board Structure” and “Board Demographics” and their influences on Board effectiveness.
This miniseries, Genius is addressing the three “Board Attributes” topics of Competence, Commitment, and Character.
To keep reading easy, Commitment has been split into two Articles – The Person & their Engagement, Derailers.
Board Attributes addresses, within the physical people appointed to the Board, their collective personalities, and how these factors impact on Board effectiveness.
Commitment covers the Director’s focus on delivering effectively on an ongoing basis. Commitment will be impacted by several Demographic areas covered in a previous week’s article. Here we shall review impacts on Commitment not already addressed.
1. The Person
Personality is the set of behaviours, cognitions, and emotional patterns that evolve from biological and environmental factors and considered to be relatively stable.
Based on a personality, we get to know the traits that predict the way a person will behave to a given set of circumstances, what motivates them and how they will psychologically interact within the team and with the issues to hand
If you have more personalities that have a glass half full disposition, rather than an empty glass attitude, the Board conversations will more likely be open to taking considered risks and progressing forward toward goals.
A person’s mindset is their established set of attitudes, their base for assumptions, methods to approach a situation, or their natural disposition.
A Board would want to have Directors with an open mindset, people with a positive frame of mind, mild temperaments, and stable mentalities.
A Chairman would find chairing “negative” mindsets exceedingly difficult to get key decisions made.
Motivation is what drives an individual, it is the reason a person acts, responds, or behaves in a particular way.
If a Director is motivated to ensure all stakeholders are considered fairly, their conversation and contribution would be different from another Director whose motivation would be to see bottom-line returns and benchmark metrics reached.
This brings additional diversities into play that a Chairman needs to address to keep conversations constructive and focused.
d. Proactive versus Reactive
Some Directors will be proactive, such that they are creating or controlling a situation engaging on the journey. Other Directors will engage by reacting once the journey is complete.
It would be ideal for the Chairman to have Executive Directors that are proactive, that take the message from the Board, know their role, and get on with delivering the business and achieving the goals.
The Board needs to be primarily proactive as a team, otherwise, they will hold back an executive team from achieving their optimum.
Within a person there is their attitude to delivering on a commitment irrespective of the reward.
If there is a need, will the Director find the resources to be able to deliver what is needed by the business?
Will that Director turn their mind to their various Board roles and contribute between meetings when prompted by events in the external environment?
Having an uncommitted team lends credence to the phrase “herding cats”. It is difficult to get anything started and even more difficult to get anything finished.
b. Appropriate focus
The Board is majority non-executive, and the Directors need to know where the invisible line is. Our description of “Noses in, fingers out” helps clarify the difference for Non-executives. Their job is NOT to do anything but to understand everything.
When in a Committee with a deep dive, the degree of “noses in” is quite intense but it is still “fingers out”. You can help management to understand, you can give guidance, training, and support, but a non-executive should never perform the role.
Equally, the focus of a Director must be relevant to the business. It is of no value if a Director is always focusing on contractual governance if the nature of the business does not involve many contracts.
A focus that is needed in boardrooms is the focus on stakeholders, to ensure ongoing embedded delivery under Section 172 of the Companies Act, 2006.