Board Room Relationships

Over the years I’ve been a member of boards, advised boards and presented to boards and as a result become passionate about, “Board Room Relationology”. Board room Relationology is the way that board members relate to one another and to the many other stakeholders they are responsible for and to. This building profitable relationships blog reflects the Relationology habits that I believe are critical to board room effectiveness.

Corporate culture tends to be highly transactional because in a large part that is how business gets done. A constant mass of transactions can however leave you feeling like you are just another component in the corporate machinery. It is however the non-transactional aspects of human interactions that build the most trust in business relationships and is the foundation of how business gets done.

When you show a genuine interest in another person you are saying, ‘I care about you and not just about what you can do for me’, this builds relational trust. By contrast the people you only hear from when they want something from you are probably amongst the people you trust the least.

How much time do you spend growing board room relationology around a coffee table building trust compared to conference table being transactional?

There are some leaders who value profit over people. In the board room they may propose or support decisions that unnecessarily damage people in the name of trying to turn a quick profit.

Valuing people however is not at odds with valuing profit, in fact quite the opposite is true. The Service Profit Chain a book by James Heskett et al argues that how a business treats it’s people determines how those people treat customers which in turn determines the level of business productivity and profit. So as a Board having a duty of care to people is not only the right thing to do it is the smart thing to do.

In the board room how much attention do you give to your duty of care for people, recognising that they more than anything else what drives your duty to make a profit?

If you challenge people without being supportive of them they will tend to right you off.  They will ignore what you have to say because it will feel like you are fundamentally against them. Contrastingly you may be supportive of a person but never challenge them in which case you could ask to what degree are you committed to them becoming their very best. The best personal development happens when people know you are highly supportive of their greatest good and in that context you can offer them high challenge feedback.

In the same way if a board knows you are committed to the greatest good of the business you can offer candid challenge and even dissent when necessary and it will be heard. In fact this is a board members legal and ethical obligation. Lack of candour and challenge can lead to groupthink and behaviour that results in bad decision making and undermined best practice in the Board Room.

As a board member how much do your colleagues know you are committed to the greatest good of the business and when was the last time you offered candid challenge and dissented on a direction of travel?

Office and board room politics display themselves whenever authority and power are used to coerce and manipulate people. The abuse of authority and power corrodes and compromises trust, transparency, best practice, ethical behaviour and ultimately profit.

Speaking truth to power is a phrase often used in the world of advocacy but perhaps it should be used a little more in the board room. In fact one of the core responsibility’s of board members is to be the independent voice of stakeholders and shareholders. Board members should be encouraged in both their strength of character and humility to be transparent about power dynamics and politics and where necessary challenge them.

In the board room how aware are you of power dynamics and when the surface do you speak up or are you silenced by them?

Like attracts like, the unconscious human instinct builds relationships with people like us because it’s easier than building with people unlike us. Diversity doesn’t happen by default so if it is going to happen it has to happen by intent. If you want to build a diverse board room then it will only happen by deliberate positive action.

The McKinsey Delivering through Diversity research report explains that, “Companies in the top-quartile for gender diversity on executive teams were 21% more likely to outperform on profitability and 27% more likely to have superior value creation” and “Companies in the top-quartile for ethnic/cultural diversity on executive teams were 33% more likely to have industry-leading profitability.” Developing an executive team and board room culture where diversity can thrive is critical to improving the likelihood of success.

In the board room how intentional are you about diversity and invest in building executive and non-executive colleagues who are unlike you?

Gossip, hearsay and talking behind people’s backs is highly detrimental to building high-trust relationships, teams and organisations. In fact it creates a toxic culture of dysfunctional teams, a high turnover of people and business ultimately failure. This environment is however is prevalent in too many workplaces and board rooms.

Instead let’s operate on the basis of what I call ‘the principle of straightforwardness’. When we have an issue with someone let’s make them the first person and the last person we talk to about the matter. Let’s talk to people rather than about people. When we are exposed to gossip and hearsay let’s either challenge the conversation or leave the conversation altogether starving negativity of the oxygen that it feeds on. Never is this more important than in a board room whose responsibility is to exemplify good practice.

In the board room to what degree do you practice the principle of straightforwardness amongst yourselves and strategic stakeholders?

Value creation is the primary objective of every business. Creating value for customers helps sell products and services, creating value for shareholders ensures the long-term sustainability and profitability of a business and creating value for employees ensures their  wellbeing, engagement and performance.

Value creation in the board room is about board members knowing what value add they are contributing and how they build the board relationships necessary to exercise their contribution.

In the board room are you clear about what competency you bring and how the team is creating business value?

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