I have written in the past few weeks about the problem with board meetings and the problem with sales meetings. It was suggested to me that it might be helpful if I explained what particular issues with a dysfunctional company board and how a well run company board would operate. In this article I intend to concentrate on dysfunctional boards or boards in crisis.
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So lets remind ourselves what issues should be addressed at board meetings? They’re the meeting that set the direction for the company, confirm policy, and directs the business response to unforeseen events either external like for example a significant change in market conditions or the arrival of a new or stronger competitor. The unforeseen events maybe internal like the loss of key staff or a major issue with sales or production. To get the best out of these meetings they should be held regularly and it should involve a review of the company’s performance.
Number 4 is hearsay management. This is a situation where the business owner/ CEO makes decisions based on their gut instinct or impulse and without proper evidence. In these situations boards are often seen as a hindrance because board meetings are a forum where members can question and review key decisions. This type of situation is often coupled with number 5 where the CEO/MD has a low opinion of the management team and doesn’t see great value in their input or they don’t want to be challenged. I have found this later situation common in family run businesses where the control is kept within the family irrespective of capability and the unwanted scrutiny of board meeting is something to avoid.
Number 6 the festering issue/disruptive director. These two often go hand in hand and the disruptive director is often a result of a long running un addressed issue where he or they consider that a poor or no decision has been taken on a subject of great importance to them and despite numerous attempts the problem is either ignored or avoided leaving a disgruntled board member. The result is that they will go to great lengths to try to raise the issue whilst everyone else will do their best to avoid it, as a result issue and those connected issues are not properly discussed and frequently board meetings are delayed or cancelled as part of the avoidance process. This situation is especially common where you have strong characters who will be persistent in the cause to the point of absurdity and in the long run is very damaging to a team as a climate of distrust will develop and worsen team relations the longer the issue is not openly discussed and some form of conclusion reached.
Whilst there are many issues surrounding board meetings don’t let this list put you off, many companies have a well functioning board. My next blog post will look at what a properly functioning board look like. I would also like to take the opportunity to give my thanks to Ivor Middleton who assisted in the preparation of this article.