Ireland: Grasp The Nettle And Deal With Problematic Board Members

Although dealing with difficult and disruptive board members can be painful, ignoring poor behaviour will inevitably lead to trouble

In recent years, there has been a huge focus on culture in the boardroom, the ‘tone at the top’ and how this impacts on the broader organisation and stakeholders.

One of the most serious challenges a chair and company secretary faces is a problematic board member who impacts on a board’s effectiveness and harmony. This can vary from slightly disruptive and irritating behaviour, to quite serious conduct that can cause extreme problems for the rest of the board or executive team.

In some cases, boards make allowances for less-than-ideal behaviours because of the strong overall contribution of a board member, but in many cases, boards are putting up with disruptive actions from board members who are making a modest contribution at best.

Even the most experienced of chairs can find problematic board members difficult to deal with and often embrace ‘hope’ as a strategy, trusting that the problem will recede in time – but in the majority of cases it never does.

Recognise the risk

The company secretary is often well positioned to recognise a disruptive board member and highlight the impact of this to a chair who may either not recognise or fully understand it. Another, often more difficult, challenge for the company secretary can be when the disruptive board member has been brought in by the chair or CEO.

The following factors have also contributed to chairs and board teams finding it difficult to ‘grasp the nettle’ and boldly deal with problematic board members:

• As board teams meet relatively infrequently, there can be a tendency to put up with disruptive behaviour
• There is still a lot of ‘legacy thinking’ and ‘ivory tower culture’ around boards, where it is almost not ‘the done thing’ to pull up a well-known or senior board member for their behaviour
• Individual board member annual performance appraisals are still only adopted by a small percentage of boards, which robs the chair of a formal structured process to deal with serious behaviour issues
• In many cases, board members do not have formal contracts for their board role and or formal terms that are subject to renewal.

Different types of disruptor

There are some common board member behavioural issues on boards and problematic board member types:

The CEO wannabe

This is a board member who is continually second-guessing the CEO and executive team, as well as being unduly critical of executive decisions. In many cases, this board member was either a former CEO or executive themselves.

This type of board member can be prone to trying to micro-manage the chief executive and executive team, does not respect the distinction between the role of executive and non-executive and can cause significant disruption to the flow of board meetings and decision-making processes.

The Pit Bull terrier

This represents an overly aggressive and combative board member; one who continually generates unnecessary tension in board discussions and is often prone to be verbally abusive and passive aggressive towards the board, or in some extreme cases, bully executives and fellow board members. This can be quite a common issue and is perhaps the most serious of cases of a problematic board member.

The super-director

The super-director is an unusual case of disruptive behaviour, whereby a particular board member’s experience and credentials are so far superior to other members of the board that they dominate discussions. The end-result can be almost like having a one-person board, as other directors become hesitant to challenge the dominant individual’s views.

The CEO cheerleader

This is the case of a board member who rarely or never challenges the CEO and executive team. In many cases they were brought in by the CEO. This kind of board member continually, and in a deliberate manner, downplays or deflects issues that might create problems for the chief executive and as a result is not respected or trusted by the others on the board.

The ‘checked-out’ board member

This issue is quite common, and can take the form of a board member who often arrives at meetings late, has not reviewed the board pack properly, is often on their phone or laptop when executives are presenting or other directors are speaking – they are going through the motions and contributing next to nothing.

The overwhelmed board member

This is the case of a director who is simply lost in the boardroom and seriously out of their depth. During substantive discussions on either complex finance, operations and strategic areas, they effectively become paralysed and cannot meaningfully contribute to the meeting. This is unfulfilling for both the individual and the board.

Dealing with the issue

The chair and company secretary need to work together to tackle a problematic and disruptive board member. It is important to note that each situation is unique, with each organisation having a different constitution, memorandum and articles of association, and each country having a different legal framework.

The following advice and practical steps on dealing with problem board members are therefore only intended as high-level guidance – for serious cases, appropriate legal opinion should be sought to identify an optimal course of action.

1 Identify and calibrate the problem

This step involves the chair either recognising the problem themselves or having the company secretary and/or other board members bring it to their attention. The chair would then consult as appropriate with the company secretary, CEO and other board members to calibrate the nature and seriousness of the problem.

In the case of the chair being the board member with behavioural issues, this is particularly challenging for the company secretary and it is often the CEO in conjunction with the senior independent board member who needs to handle this.

2 One-on-one meeting

This step could be either an adhoc meeting called to discuss this issue, be part of a regular check-in or part of the board member annual performance assessment process. In either case, it is important that the chair raise the issue in a very clear but sensitive and professional way, its impact on the board and provide the board member the opportunity to respond.

In many cases, the problematic board member will push back hard and require the chair to display a strong mix of leadership and emotional intelligence to achieve an appropriate solution.

3 Concrete action plan

Where a disruptive board member refuses to acknowledge or modify their behaviour, a chair has no choice but to face up to this and take appropriate action in order to protect the integrity and effective functioning of the board. This can either be a more formal process of escalation and in the most serious cases, can lead to the appropriately handled removal of the board member from the board.

Problematic board members that seriously disrupt a board’s operations and effectiveness represent a considerable challenge for the chair, company secretary and fellow board members. In many cases over the years, the nettle was not grasped at the appropriate stage and an effective action plan implemented to address the issue.

Where poor behaviour is continually tolerated, it inevitably leads to a serious impact on the board as a team and ultimately lets down all other directors, shareholders and stakeholders. This is an example of where a chair, supported by the company secretary, needs to show genuine leadership in identifying and resolving a potentially damaging problem.

Kieran Moynihan is managing partner at Board Excellence

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.