24 July 2017
Our community discusses how conflict and tension within the board arise and can be usefully resolved.
Board conflict is among the thorniest problems company secretaries or directors have to deal with, taking in everything from strategic disputes to personality clashes.
As such, the relevance of ICSA and Henley Business School’s new report, ‘Conflict and Tension in the Boardroom’ needs little explanation. We wanted to find out about the experience of the Governance and Compliance/Core community on this issue.
Asked if they had to deal with boardroom tension or conflict in the past year, 57% of respondents said they had, with 36% saying not. Of those who had to deal with tension or conflict, two-thirds said it had been constructive in the end, with the rest indicating otherwise.
Unconstructive disputes are likely to remain unresolved beyond a given board session. As one respondent told us, after a ‘tense board meeting and a lengthy discussion’ the ‘issue was not resolved and rolled over’ to future sessions. Another described an unresolved clash as an ‘elephant in the room’ situation, with no end in sight.
This is unproductive, but we enquired whether such conflict and tension could be usefully resolved. Many reported that resolution often involved the departure of one of the board members.
As one person put it: ‘Someone did the honourable thing and offered to step down.’ In another case: ‘An agreement was made between the board and the CEO that he would exit the business.’
However, many highlighted the role of discussion in settling disputes. One said: ‘Every party listened to each other and each got to explain their point of view.’ Another said: ‘All parties discussed the matter at length and a solution to move forward was found.’
“It is the culture implemented by the CEO and the skill of the chair which ultimately ensure whether tension or conflict are present in the first place or later resolved”
Talks outside the boardroom were also viewed favourably. To settle conflict, one person recommended ‘discussion outside the meeting and the decision on the controversial issue deferred’ until next time, while another said tension should be eased ‘through side discussions and mediation outside of the boardroom’.
One described the process as ‘a lot of offline discussions’. These strategies deal with conflict as it arises, but some respondents focused on longer-term management of tension and conflict.
‘I believe it is the culture implemented by the CEO and the skill of the chair which ultimately ensure whether tension or conflict are present in the first place, and then whether any issues are resolved constructively,’ one person said.
Others agreed, emphasising the importance of the chair, CEO or senior independent director (SID). ‘Ultimately it is the chairman who should be dealing with this,’ said one. ‘Primary responsibility for this lies with the chair and/or the SID,’ another agreed.
Despite this, many saw a role for the company secretary in settling disputes. ‘The company secretary should also provide an ear to all members of the board and understand their grievances and issues,’ one said, adding that this information should be fed back to the chair.
Another put it simply as ‘playing the role of adult’, while one person said the role was like that of a ‘diplomat’.
Some believe that the company secretary should just fulfil a neutral middleman role. ‘The company secretary role is to support [the chair and SIDs], remaining neutral other than on points of law or governance,’ one respondent said.
‘The company secretary is often caught between a rock and a hard place and it is not their role to resolve the conflict,’ another replied.
Though some saw a lack of conflict as healthy, diverse opinions were not always portrayed negatively. As one respondent put it: ‘It is important for boards to possess a broad skill set and diversity, and differing opinions should be heard with respect.’
If you are a company secretary or governance professional at a leading UK business, and you would like to take part in or comment on future surveys, email firstname.lastname@example.org