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The Conference Board Review® Article
Boardroom Blitz
What happened to real debate among corporate directors?
By Des Dearlove , Stuart Crainer
Stuart Crainer and Des Dearlove are the editors of The Financial Times Handbook of Management and founders of the training and consulting company Suntop Media. Their last article was "Over There" in the Jan/Feb 2007 issue.
Remember the first time you ventured into a boardroom? It may have been empty, but chances are the memory is seared into your corporate soul. The table, polished to perfection. The interior design, straight from boardroom central casting. The art, venerable oils of corporate elders or bold abstract splashes. The thrill of being in the corporate cockpit!
"My memory from my first board meeting as a director was how well reality corresponded with my expectations," says Jan Lapidoth, a board member of the airline SAS in the 1990s. "I decided that my role was to ask intelligent questions rather than make authoritarian statements. But what I found around the table were old-timers with different ideas. They played their game and enjoyed listening to their own voices. Worst of all, they did not like team play. They were almost all CEOs, used to being surrounded by heel-clicking associates. It didn't take long before I became one of them and behaved as they did, believing that the board represented superior strategic thinking, the VPs didn't understand much, and when things didn't work, it was the VPs' fault."
Lapidoth's experience is not unusual. We asked a company vice president for his memories of interacting with the board: "What I got from the board was the corporate equivalent of friendly fire. After every board meeting, the CEO used to call us VPs to a short meeting to be grilled by the board members on any proposal we had submitted. What became obvious then was that we and the board were playing on opposing teams. We, the division heads, had spent days preparing lengthy documents to be sent out at least ten days before the board meeting to give the directors time to read and think. Did they? They stuffed the documents in their briefcases, all two hundred pages or so, and leafed through them in the taxi to the meeting. They extracted a paper at random, formulated a trick question, and entered the meeting room ready to fire. After all, board work is a power game."
Breaking the Silence
Indeed, the real corporate power game is not played out around water coolers, on the factory floor, or in front of the media. Real power is not witnessed at sales conferences or even at executive retreats. Real power is -- or should be -- exercised in the world's boardrooms. It is here that business legends should be made and destroyed, where profit-boosting strategies should be hatched, and the great and not-so-great decisions should be made. The perfect boardroom would echo with the clash of corporate rams -- young and old -- butting up against each other in ritualized combat.
Indeed, a fundamental role of boards is to encourage debate and resolve conflict. The best boards thrive on argument. GM's legendary Alfred P. Sloan knew this well. On one occasion, after a brief boardroom debate, Sloan famously said: "Gentlemen, I take it we are all in complete agreement on the decision here." His fellow directors nodded. "Then," Sloan continued, "I propose that we postpone further discussion . . . to give ourselves time to develop disagreement."
These days, board directors are more likely to cozy up to one another than encourage debate. In place of raised voices, there is the quiet hum of a box-ticking machine on autopilot, as directors desperately try to avoid controversy of any kind. The fashion is for leaders who don't rock the boat.
The new rules on boards introduced by the Sarbanes-Oxley Act are partly to blame, for they've shifted attention onto performance -- or at least compliance -- at the expense of esprit de corps. Great teams have both -- think back to any effective team you were involved with and you'll recognize that silence is unhealthy. Sarbanes-Oxley risks undermining the effective functioning of the political process. It has led to protocols determining the behavior of board members in such ways that directors' temptation, as they anxiously eye their growing responsibilities, is to concentrate on the administrative process and spend less time on discussion and thinking. It's difficult to engage in robust dialogue if you're busy ticking boxes and looking over your shoulder imagining the next perp walk.
Comments? Write a letter to the editor.
Return to the November/December 2007 The Conference Board Review® issue.
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