The Importance of Boardroom Dynamics

Boardroom dynamics, as the title suggests, are an intricate web of behavior which affect and interact with each other. They are, more and more being recognized as an essential element of effective governance. Regulators, behavioural scientists, governance specialists, and boards themselves are increasingly recognising that the softer aspects of boardroom behavior, as opposed to structures and boxes checked, make a a real difference to a board’s effectiveness.

The decision-making process of a board can be compromised when members are persuaded by their superiors to put their personal interests over the interests of the company and the interests of its stakeholders. No matter if a member has a stake in a particular project or whether the company has already made a commitment to a specific strategic direction, spring loading is a concern which must be addressed in the face by promoting transparency and accountability. Communication channels that are open, robust governance structures, diversity and ongoing education and training for board members are proven methods to reduce spring load.

It is also crucial for boards to have robust debates and to embrace constructive conflict, especially when tackling controversial issues or making decisions. This can help avoid groupthink when the board fails to think about all options and make a suboptimal decision for the business. Boards may also employ their own independent third-party advisors as well as a corporate secretary to create the structure, challenge assumptions and act as the devil’s advocate.

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