News and Views
January 17, 2023
Posted in: WATSON Views
It’s that time of year again. Endless emails outlining the many things boards should focus on this year: 5 things for directors to consider…, 3 practices for 2023…, 10 topics facing boards this year… As directors and board advisors we are highly attuned to the ever-growing list of mission critical issues boards need to focus on and the challenges this growing list poses to the execution of the board’s responsibilities. With increased business complexity, demanding board stewardship requirements, and the need for more board oversight, the director role is becoming more demanding, and more complex.
So, as we enter 2023, we have ONE thing to share. From our observation advising and partnering with hundreds of boards, it’s not about what the board does, but about how it does its work.
Over the last year, we’ve heard about, and seen a culture of distinctly Canadian collegiality in boardrooms that limits constructive dialogue. It’s not simply that we’re too nice or too polite, it’s that in this highly complex context, individual directors are not actively sharing reservations, concerns, and alternative views, and boards are not having the quality of conversation they need to make important decisions. This isn’t intentional and doesn’t come from a bad place. It is, in part, attributed to a Canadian culture that avoids conflict and pursues consensus–perhaps too quickly–at the expense of intellectual curiosity and debate. In some cases, lack of debate may be an indicator that more work is needed to foster genuine inclusion at the board table.
We believe there are opportunities for boards to embrace more openness and healthy tension to elevate the level of constructive dialogue and the board’s value-add. For critical discussions, we see the value of intentional dissent that embraces opposing points of view and enables directors to disagree and build on each other’s points. Intentional dissent is a productive way to introduce friction into the decision-making process. It’s an important step to root out blind spots, kick the tires of recommendations, and bring different perspectives on issues and options to get to the best decision. To be fully satisfied with their decision, boards should not only be satisfied with the decision itself, but the process to get there.
Regardless of the issue on the agenda–from cyber, talent, and DEI to supply chain, energy transition, and recession–the quality of the board’s contribution depends on the quality of the conversation. And given the challenges facing organizations and boards this year, strategic conversations require that boards embolden all directors to weigh in on context, options, and paths forward. Here are some ways the best boards, chairs, and directors we know combat Canadian collegiality:
We often hear that the best directors ask hard questions in a “soft” way. They put tough issues and different perspectives on the table in a way that others can hear. Their tone and style complement and enhance their contributions. They are polite and collegial, and skilled at sharing different perspectives, or challenging the status quo. They are skilled at depersonalizing feedback and instead focusing on ideas and options. This level of EQ often requires time and experience, superb role models, and high-quality feedback to truly master. It also requires courage. At the board level, it requires someone to call attention to the problem to start to see a shift in behaviour. Getting used to more intentional dissent and encouraging different views can be a slow and uncomfortable progression and one that should be monitored and acknowledged.
All boards make decisions today that will shape the future of their organizations. For boards that practise good governance, enhancing the quality of dialogue and decision-making in the boardroom is an opportunity to go beyond the mechanics and lists of oversight areas and add real value in shaping their organization’s future. This one thing will not be easy, but it will have significant impact on the board’s effectiveness in the year ahead.
Wishing you a safe and spirited 2023.