When people work together as a group there will always be a difference of opinion. It is certainly not unusual for opposing views to lead to challenging discussions in the boardroom.
Non-executive directors (NEDs) that become embroiled in such discussions have to be very careful not to antagonise other members of the board. Conflict in the boardroom can have a negative impact on the performance of the leadership team. It is widely regarded that conflict arises through incompatibilities of personalities or a lack of faith in a person’s capability. These niggles are eventually expressed as annoyance and animosity which contributes to the tension.
Depending on the culture of the organisation and board, NEDs, a part-time attendee on a board of directors, may be considered the outsider. The onus of responsibility to nurture relationships, therefore, rests on your lap. This article details three common issues you may encounter in your role as a non-executive board member and explains how you can prepare for such eventualities in order to avoid them or manage them.
Lack of Trust
Trust is a crucial component in teamwork; especially when the stakes are high. Building trust among your fellows requires an open, inviting and engaging temperament. Trust is earned by letting people get to know you. NEDs need to make an effort to get to know the individuals on a board personally as well as professionally. Boards that organise a meal or an event will give NEDs an opportunity to meet everyone. If offered the opportunity to attend, you as the NED can nurture your relationships with other individual board members.
It’s obviously important that you earn professional trust. While you can be confident there is an element of trust in you already - otherwise you would not have been invited on to the board - it is pertinent to prove this in the boardroom. However, it is equally important that you have patience and build trust gradually. NEDs that steam into a boardroom and try to take over with their ideas do not nurture relationships.
Non-Executive Directors that are new to the position earn respect by understanding the company and its goals. Your primary role is to bring an independent perspective and provide critical advice in your area of expertise. Trust is earned when you prove you have the knowledge and skills to effectively help steer the company in the right direction and ensure that quality, safety and financial targets are accomplished.
Conflict of opinions
They say knowledge is power - but unless it is shared, knowledge is not powerful. A Financial Times report detailed that a study of 41 failed corporate companies had a boardroom with a gap in skills and a blindness to risk. The root of the problem was because board members were not sharing their knowledge and challenging one another to make the right decisions.
When a group of people are working together on a project, it is prudent to assemble a team of individuals that bring a set of unique skills, knowledge and experience to the table. Whilst it is prudent for NEDs to nurture relationships, you also need the confidence to challenge the ideas of your peers. If you know a suggested proposal will not suffice, it is your responsibility to speak out and share what you know.
Sharing knowledge for the success of the company is more important than ever in the modern business world. Technology is driving industry at such a fast pace, that trends, policies and regulations are constantly evolving.
As companies come under increasing pressure to reach performance targets, the need for stakeholders to act quickly and proactively is relevant. There will be differences of opinions of course. It is how you present your opinion that matters.
Diplomacy, oratory skills and the ability to present knowledge to a varied audience are skills that NEDs must develop. It is not the point that you want to put across that matters, but how you deliver your opinion.
Almost every company encounters a series of problems. These can range from low-performance results to a wide variety of crises including bad press, public outcry, activism, and mergers.
In times of crisis, some executives look towards non-executives to find a solution. As the perceived outsider, the obligation to resolve problems can add unwelcome pressure. It’s not uncommon for NEDs to feel vulnerable when they are expected to find a solution to problems. Failing to do so may set you up to be the scapegoat.
You may not have the answers immediately, but Non-Executive Directors typically have more time to find solutions. NEDs are expected to contribute heavily to the decision-making process and if companies are paying you a handsome salary, you have to prove your worth.
The role of Non-Executive Directors can be complex. Personality and interpersonal skills are equally as important as specialist knowledge. NEDs also need to feel confident under pressure and portray an air of exuberance that consistently builds trust.
If you’re contemplating taking up a role as a Non-Executive Director register with us today and speak with one of our knowledgeable advisers.