Board Evaluations That Go from “Check-the-Box” to Transformative
What board member hasn’t heard, “The board speaks with one voice or not at all”? Every board should agree on the core beliefs that support the success of its organization. Projecting a unified message that reflects those core beliefs is critical.
However, sometimes the “one voice” principle — designed to guide the board’s behavior after examination of board business and discussion — can seep into boardroom discussion, suppressing inquiry and new ideas.
While embracing different viewpoints isn’t always easy, successful corporate boards will create an atmosphere that encourages questioning and sharing diverse perspectives. “Creative tension” — the messy, sometimes raucous dialogue that arises from constructive discontent, respectful challenge, or asking “what if?” questions — is what Punit Renjen, CEO of Deloitte Global, calls this process of questioning in his Forbes article titled “The Crucial Edge that Makes a Board Exceptional.”
Boards may not welcome questions or challenges for a variety of reasons: unwillingness to upset the status quo, inflexible agendas, new or more reserved board members uncomfortable with speaking out, concern about exacerbating tensions with the CEO or upper management, or just a “That’s the way we’ve always done it” mentality.
Even if board members recognize the value of considering opposing views, certain factors may get in the way of embracing creative tension. Strong personalities dominating the conversation, discomfort with confrontation and an inability to see past challenging questions to the new ideas they may spark can stymie a board’s best efforts.
The annual board evaluation process, facilitated by a third party in a manner that ensures anonymity, can be a vehicle for bringing out board members’ concerns and ideas that may not fit neatly in an agenda category. This can also be preferable to an interview based model, which can be tainted by interviewer bias or just discourage forthright or critical comments. Open-ended response categories included in an anonymous evaluation questionnaire can provide a neutral setting where board members feel comfortable bringing up ideas that might challenge the “one voice” that can dominate board conversations. Even more standard scored questions can highlight where board members have differing views on particular topics and provide the basis for more pointed dialogues at a meeting.
From What-if? to Aha!
Openness to creative tension is a key factor in making good boards exceptional, according to Renjen. “Opposing views can collide, but they also can converge and yield exciting new ideas, especially when an organization’s core beliefs unite everyone involved.”
As many as 63% of directors feel that the board self-evaluation is a check-the-box exercise, according to a 2014 PWC Annual Corporate Director Survey. Can an evaluation instrument tailored to bring out divergent perspectives change directors’ and board chairs’ feelings about the process? If board members recognize the value of creative tension in generating ideas and promoting dialogue, they may see the evaluation process in a new light, more as a tool for board growth than a regulatory chore.
For comments in an evaluation instrument to be of value, however, the instrument must have a mechanism — preferably built into the process from the beginning — to present these ideas for discussion.
Rapid change in many technology and financial sectors constantly brings out new questions across industry sectors. Boards that embrace creative tension know that it is healthier — for the board and the organization as a whole — to address these questions in the boardroom than to have them posed by their shareholders in public.