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Developing constructive disagreement in the board

Monday, November 20, 2017 - Lars Kappel, Director, Board & Executives at Mannaz

When was the last time your board disagreed on something?

Many board members have to consider that for a moment before answering. Some reply that fortunately it is a rare occurrence, while others say that it is unfortunately a rare one.

It is a question that divides board members into two groups: Those who perceive disagreement as something undesirable, and those who see disagreements as something which creates value. Both views are correct in their own way. It depends on the level of disagreement and how the board handles disagreements.

The schism is essentially that complete agreement or complete disagreement does not create value, but that the right level of disagreement does.

Constructive disagreement

A board achieves greater value creation by ensuring that the items on the board's agenda are examined from a number of different perspectives.

Ways to achieve such a variety of perspectives include ensuring that the board is comprised of a diverse set of individuals in terms of, for example, background, culture, experience and age. It is important that the diversity in the board's makeup has been carefully considered and put in relation to the chosen strategy, but also that this diversity results in different perspectives that can challenge and further develop the strategy.

In order to bring about constructive, value-creating disagreement, the board must be aware of what perspectives and personal characteristics each board member brings to the table. This requires an active, inquisitive form of behaviour from all of the board members rather than one where the board is generally passive and consensus-seeking to such an extent that new perspectives or takes on any particular issue are suppressed.

A board achieves greater value creation by ensuring that the items on the board's

agenda are examined from a number of different perspectives.

A common language

This diversity can be a strength as well as a challenge which demands a greater focus in order to produce the desired result.  Diversity in experiences and backgrounds leads to a difference in our understanding of the various aspects of the board's work. These differences in understanding of the same methods can be so severe that the discussions ultimately become more attitude-based than knowledge-based. In other words, one must also strike a balance in terms of how much diversity should be strived for.

For the board - and the chairman in particular - establishing a common language while at the same time expanding and challenging deep-rooted habits and routines in the board's work can prove to be a major endeavour. If the discussions have been attitude-based for a long time, there may be many emotional factors to consider when initiating a shift to new habits and tools. That is why many chairmen choose to bring in external assistance for this part of the board's development. A consultant will come in with an outside-looking-in perspective, a comprehensive toolbox, experience from other processes and other boards and will bring the latest knowledge to the table. In my experience, in order for the process to be a success it is crucial that the consultant does not assume the position of an expert, but instead works together with the board in an established and delineated process to identify and adapt the tools, methods and behaviours that will create the most value in the board.

Results of constructive disagreement and a common language

"We were in disagreement at the last board meeting, and it gave us some entirely new perspectives that the senior management could continue working on in relation to an issue we have been trying to resolve for a while."

This statement came from an enthusiastic board member who had just attended an ordinary board meeting well into a development process with his board.

Disagreements in the past had been highly irrational, but this time, the differing perspectives were accepted and valued as part of the professional working process, which allowed the board to not only gain a number of new professional perspectives but also subsequently reach a consensus on what the future basis of the senior management's work should be.

They had, as he explained, tackled the problem in a different way than before, which was further helped by the fact that the board now had a shared understanding of the framework and content of the discussion.

A common language - targeted onboarding

A common language and a number of shared methods allows the board to work with both handovers and onboarding. The handover of assignments and decisions can be based on a solid and thoroughly prepared basis that the new board - after taking the new methods to heart - can very quickly continue working on. The effect and value creation of the board work is accordingly raised to a much higher level both before and after a transition, as the common language can be utilised as a foundation to create constructive, value-creating disagreement and make use of the diversity of the board.

Author

Lars Kappel

Director, Board & Executives at Mannaz