Reasonable people can disagree on important issues. In fact, a healthy Boardroom discussion requires information to be looked at from multiple points of view with a willingness to challenge assumptions and bias.
It's reasonable to assume the more important the decision being made the higher the expectation that due diligence and open questioning is taking place.
But what do you do if you firmly believe the consensus decision is wrong and that the Board is veering toward a decision that could be extremely damaging?
If you firmly believe a decision is wrong, inwardly question yourself: in this instance, are you too fixated on your own beliefs? Is it the case that you are unwilling to see anything that does not match your personal belief?
If you suspect this may be true, be willing to look at your belief and determine whether it is fixed or whether you can see there might be other possibilities.
If you can see there might be other possibilities and you still know the Board decision might not be in the best interest of the organisation, then challenging this decision is worth pursuing.
How do you know the Board’s decision making process is robust?
As a director, you should do what you can to ensure that the Board’s decision making process is rigorous and that a full range of strategic options for the Board’s decision are clearly presented.
It's important to make sure that all relevant information has been brought to the Board’s attention so it can compare options, assess their strategic implications and come to an informed choice.
Once the issue has been properly outlined, the Board may proceed with robust debate. The easiest way to influence the Board’s decision is before it has been made. Respectfully present your point of view while the Board actively engages with the issue.
If the Board is debating an issue that requires specialised or technical knowledge, it's always a good idea to solicit the expertise of your senior executives or technical personnel rather than have a conversation that lacks basic understanding. This is as true at the subcommittee level as it is at the Board level.
Three ways to deal with a Board decision that you do not agree with
Just a little note on 'do not agree with'. Be aware that when you have the energy of 'I do not agree with this' it is often a judgment you have made about something not meeting your personal beliefs or values.
It is often not based on analysis or strategic implications. If you have this feeling 'I do not agree with', ask yourself 'is this a judgement, or is it an awareness?' If it is a judgement, then you will be biased and blinkered in your analysis. If it is an awareness, you will be able to see many possibilities, identify which one or two will create the greatest impact, and you can continue to explore more options from a broad range of alternatives.
- You support the Board’s decision despite your personal objections
The reality of working with a leadership team means that sometimes it's better to go along with the group decision as long as there is evidence they are acting on sound reasoning and in good faith. If there is no reason to doubt the Board's decision-making process, you should be willing to concede if outvoted on a particular issue. If the Board is not acting on sound reasoning and in good faith see point two below.
One question you could consider asking: “If we were to go this way, what would our organisation be like in 5 years, ten years and twenty years?"
If you believe the Board has been thorough, fair and has fulfilled its duty as a governing body, you then should actively and publicly support the decision of the Board.
In this case, you should never:
This approach may be at odds with what your gut tells you, however, it's important to remember that no decisions should ever be capital 'F' final. It is always possible to reconsider, modify or resolve decisions well after they have been made. (Even though most people don’t realise this is a possibility.)
- Undermine the decision by undercutting its implementation or acting defiantly
- Try to distance yourself from your fellow Board members in private backroom discussions
- Recruit others (including staff and community) to object to the decision
In fact, identifying when a decision needs to change is far more important, and a greater marker of agile leadership, than blindly implementing past decisions despite their apparent failure in the present context.
2. Taking a firm stand: What if the Board is making a mistake?
Whenever you believe that someone has made a mistake (and someone also includes you), be aware that this often means that you have judged something as right or wrong, rather than asking “is this in their best interest?”
If there is an issue that you believe conflicts with your legal and ethical responsibilities, then you have a responsibility to voice concern, and continue voicing this until it is resolved. This is what is termed the Theory of Escalation.
This means that you do what you have to do to raise these concerns at the subcommittee level, the Chair level, the Board level and possibly the auditor level if you are truly aware that the Board is putting the organisation at significant risk by not fulfilling its legal and statutory obligations.
Only after you have escalated this should you consider resigning. At all times, you need to be aware of respecting the confidentiality of Boardroom decisions outside of the Boardroom, as you will still be subject to the legislative requirements concerning the use of confidential Board information. If required seek legal advice.
Theory of Escalation Cheat Sheet: The steps you should consider taking if faced with no option but to escalate a serious situation. Download it here.
- Ask the Board for an independent, expert evaluation of the situation
Using specialised, objective information in an evaluation can bring greater clarity to the facts of the issue. Data, logic and reason are effective ways to reduce any emotional biases at play.
If the outcomes of this evaluation are ignored, or rejected altogether, ensure that your 'No' vote is recorded in the minutes or record of the meeting. When the minutes are issued, check to be sure it has been recorded properly. If a lawsuit is brought against the organisation, the noting of your "No” vote would form part of your defence but you may still be held liable. You are expected to escalate the issue as required as per the Theory of Escalation above.
- Express your concerns to the Board Chair
It’s critical for the Board Chair to hear your concerns as soon as possible. If the Chair is well respected, they may help other directors see the issues that they otherwise are ignoring.
As part of voicing your concerns, you may wish to consider potential consequences for a range of stakeholders - regulators, members, funding bodies, societal watchdogs, media, even future Board members.
Ask the Chair if you may speak to the Board at the next meeting, directly addressing the areas of greatest concern to you. If the Chair agrees, prepare a briefing paper for presentation to the Board. If permissible, this briefing paper can be added to the meeting agenda and a hard copy provided to all Board members prior to the next meeting.
Given the opportunity to read the briefing paper beforehand, many Board members will be better able to engage in reasonable dialogue. Board members who are not present at the meeting are also in a better position to understand why you feel the need to challenge Board consensus.
This briefing paper is also formal documentation of your concerns: You may be outvoted, but your reasoning will remain on the permanent record.
If the Chair is combative, and will not allow you to address the Board directly or add your briefing paper to the Board agenda, then be prepared to send this individually to each of your Board members and enlist their support to ensure this is discussed at a Board meeting.
If you choose to take a firm stand by adopting any of the above points, it's important to remember that you are still acting as part of a leadership team. Communication should be kept open and transparent or you risk creating a split on the Board or even provoke legal action. The vision of your organisation is the common goal to which you should be striving, therefore avoiding or minimising unhelpful conflict is critical.
3. I’m still angry and disappointed over a decision the Board has made. What can I do?
If you can see the negative outcomes of the Board's decision begin to take effect, make your awareness available to others but always be clear and reasonable. But once a decision has been made, it is not in your best interests to continually provoke the Board, act condescendingly to those individuals who voted against your desired outcome or otherwise become disruptive. Despite personal reservations, make it clear that you will work with the decision.
It may be difficult to adjust your expectations at first, but remember any decision made by the Board can be amended or reversed entirely given enough time and evidence.
Finally, if you have done all of the above, and still feel that you could not work with the final decision, consider resigning from the Board.