Great Boards Have Great Dynamics

There are “good” boards and then there are “great” boards. Increasingly, research points to the link between effective board dynamics and shareholder value. In fact, 73% of directors polled in a recent study indicated that “great” boards are a substantial component of corporate success.

A culture built on candor, trust, collaboration and mutual respect sets the framework for positive dynamics among the directors. An atmosphere of honest and open communication enhances the directors’ ability to ask management the tough questions, to challenge assumptions and to truly leverage the value of the entire board to the organization. This is a key finding, since 88 percent of the respondents in a recent RHR International study indicated that the quality of dialogue and debate within the boardroom is a major differentiator between average and great boards.

“A good feedback process helps develop the effectiveness of every  individual director and the dynamics of the group as a whole.”

It is important to keep in mind that board dynamics are always complex. The odds of harmonious interaction happening spontaneously are slim. Therefore, careful orchestration of the dynamics is central to the development and maintenance of a great board. Group dynamics are influenced by a host of factors, many of a social-psychological nature. Tying all these elements together requires strong leadership—an effective, non-executive chair or a lead director who pays close attention to the working relationships.

Study respondents agreed, often commenting on the influence of effective relationships on facilitating strong levels of communication between the directors and the CEO. In addition to giving feedback and acting as an honest broker between the board and the CEO, an effective lead director can ensure that everyone is on the same page and aligned with the corporation’s goals and strategies.

Finally, remember that maintaining productive board dynamics is a journey, not a destination. A good feedback process helps develop the effectiveness of every individual director and the dynamics of the group as a whole. Based on the feedback, the composition of the board may change. The new dynamics will then require monitoring and aligning by the lead director. The loop is continuous.

Unfortunately, respondents to the RHR survey indicate that only 4 percent of U.S. corporate boards have adequate feedback mechanisms in place. The journey continues.


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