Bothwell P. Nyajeka
IN my previous article, I discussed the causes of boardroom conflict and argued that conflict is not necessarily a bad thing. In fact, I worry more about a board where everyone agrees all the time than one where directors challenge each other. A board without disagreement may simply be rubber stamping management decisions or suffering from groupthink.
Directors are appointed because they bring different skills, experience and perspectives. They should therefore ask questions, challenge assumptions and express their opinions. A director who remains silent is not adding value to the board or to the shareholders who appointed him or her.
However, there is a difference between healthy disagreement and destructive conflict. Healthy conflict improves decision making. Toxic conflict destroys relationships, paralyses the board and ultimately negatively affects company performance.
The responsibility for ensuring that conflict remains constructive rests largely with the board chairperson. He or she holds the ultimate responsibility for keeping boardroom conflict constructive because they control the meeting dynamics, set the cultural tone, and possess the authority to intervene when debates become destructive.
From my experience serving on boards and training directors, I have observed that most toxic boards did not become dysfunctional overnight. They deteriorated gradually because small disagreements were ignored until they became personal battles. Therefore it is important to deal with conflict early.
When directors stop talking directly, split into factions, or debate outside the boardroom, the board is failing. The chairperson must address these warning signs immediately with an open and honest discussion before positions harden.
Boards must also distinguish between the visible problem and the real problem. A disagreement about a board paper may actually be frustration over late circulation of board packs. A procurement dispute may hide an undeclared conflict of interest. A disagreement over strategy may simply reflect a power struggle between the founder and the board. I have also seen disputes about directors’ fees that were really about directors feeling ignored and disrespected by management.
One of the biggest enemies of good governance is the boardroom rumour mill. If a matter affects the board, it should be discussed in the boardroom and recorded in the minutes.
Directors should be free to disagree with management and with one another. They should be encouraged to ask difficult questions and challenge proposals. However, disagreement should never become personal. Bullying, intimidation and attempts to embarrass colleagues have no place in a properly governed boardroom.
The chairperson plays a critical role in maintaining this balance. Every director should be given an opportunity to contribute. Quieter directors should be encouraged to speak, while dominant personalities should not be allowed to monopolise discussions.
Over the years, I have learnt to recognise certain signs that indicate a board has become toxic. Directors begin voting in groups rather than on the merits of the issues. Information is deliberately withheld or circulated too late. Board resolutions are ignored or implemented selectively. Independent directors stop contributing because they fear criticism or isolation. Board meetings become tense and unproductive, and director resignations increase.
Every board experiences difficult meetings from time to time. However, when these behaviours become the norm rather than the exception, the board has become dysfunctional.
A toxic board can be repaired.
The first step is to acknowledge that a problem exists. This is often achieved through an independent board evaluation. In my experience, directors are usually more candid during confidential one-on-one interviews with an external independent professional board advisor or consultant than during formal board discussions. These interviews often reveal issues that have remained hidden for months or even years.
Where the chairperson is part of the problem, that issue must also be addressed. Similarly, if a founder, chief executive or influential director has become the source of ongoing conflict, the board should confront the issue rather than continue working around it.
Sometimes the board simply needs an independent facilitator to guide difficult conversations and rebuild working relationships. In other cases, governance training, a revised board charter or clearer delegation of authority may resolve the underlying problems.
Some disagreements often require negotiation. This works where relationships between the disagreeing parties is still functional. However, if the conflict has become more serious, mediation may help the parties understand each other’s concerns and rebuild trust. These approaches are generally preferable because directors usually need to continue working together after the dispute has been resolved.
As a last option, boards can consider litigation. This should be the last option because court proceedings consume management time, increase costs and often expose private boardroom disagreements to public scrutiny. However, there are circumstances where litigation becomes unavoidable, particularly where legal rights need protection, but boards should never rush to court because of wounded egos.
The most important question after resolving any conflict is not who won the argument. The more important question is: What governance weakness allowed this conflict to arise in the first place?
The answer may require changes to board processes, improvements in the quality of board information, clearer conflict-of-interest procedures or even changes to board composition.
Ultimately, boardroom conflict should become an opportunity to strengthen governance rather than weaken it. This is because the boardroom is not a battlefield where individuals seek personal victories. It is a place where independent minds come together to protect the long-term interests of the company and its shareholders.
l Nyajeka is a business consultant and board advisor. He has vast experience as a corporate executive and has sat on various boards in Zimbabwe, Botswana, South Africa and Uganda. He is currently chairman of ACR Solutions and is also a seasoned trainer and facilitator for the Institute of Directors Zimbabwe (IoDZ). For business consulting, board advisory and executive coaching services Email him on: bnyajeka@acr4solutions.com