Managing emotional dynamics for an effective board

EFFECTIVE boards demonstrate high emotional intelligence and a steadfast commitment to continuous improvement. Boards are distinctive leadership entities. With a dual mandate of shaping strategic direction and governance frameworks, they must remain adaptable and responsive to internal and external dynamics.

Positioned outside the organisational hierarchy, boards interface with both external stakeholders and management.

Despite their considerable authority, decisions rest on collective agreement in the form of resolutions of the board. Non-executive board members are not expected (or legally entitled) to act autonomously without the authority conferred by a resolution of the board.

Navigating board dynamics

Corporate governance operates akin to a finely-tuned symphony orchestra, with board members serving as diverse musicians who synchronise their efforts under the guidance of a conductor.

Just as a musician’s performance can profoundly affect the entire orchestra and its audience, stakeholder discontent has the potential to shape board perspectives, emotions and decision-making processes.

Today’s boards include high-performing executives, industry specialists and subject matter experts who often have many years of business experience leading teams. While they may have been successful leaders in dealing with complex issues, their skills may not always result in them being effective board members, where influence and managing team dynamics are critical.

A board’s diverse composition – individuals with varied experiences, beliefs and motivations – can introduce distractions.

A director’s ego, or sense of self-importance and self-identity, can hinder collaboration in the boardroom, disrupt communication and lead to dysfunctionality. This can lead to disruptive dramas in the boardroom which stifle healthy discussions, drown out the voices of others and create a “yes” culture where other directors hesitate to voice alternate opinions.

Moreover, despite their shared responsibility, the company’s ownership structure can impact the dynamics in the boardroom. For instance, the split between independent, non-independent and executive directors; whether listed or family-controlled; whether the chair is independent or the controlling shareholder, and so on.

Coupled with the external environment’s state of flux, this can lead to some directors becoming preoccupied with their own survival. And this can further exacerbate boardroom dysfunctionality – as was the case in some high-profile disputes such as in OpenAI and Tesla.

Embracing reflective practices

In today’s Bani (brittle, anxious, non-linear and incomprehensible) environment, where scenarios are frequently complex, what may have been effective in the past may not necessarily apply to the challenges of today.

Under pressure in critical moments, with limited information and time, directors must be wary of resorting to fast, automatic behaviours and relying on instinct and past experiences to make split-second decisions. Further, boards should avoid falling victim to groupthink or prioritising harmony over critical evaluation. Similarly, they should avoid dysfunctional conflicts, such as power struggles or differing agendas.

Good directors are self-aware and possess emotional intelligence (EQ), or the ability of a person to understand, use, manage and handle emotions. This concept extends to the collective board level through group EQ. Effective boards value reflection and appreciate the merits of deliberate decision-making over impulsive reactions.

Adopting a paradoxical mindset enables boards to address competing demands and effectively support organisational change. Similarly, fostering negative capability – the ability to tolerate ambiguity – allows boards space for observation, engaging discussions and problem-solving.

Addressing unspoken issues

Boards should also be mindful of unspoken issues that hinder transparency and promote passivity, as these can significantly diminish the effectiveness of decision-making processes.

Directors should listen to what is being explicitly communicated and be attuned to the subtler, unspoken sentiments that may surface during board discussions. These unraised issues, often regarded as “elephants in the room”, can provoke anxiety or conflict, if left unaddressed.

Being attentive to nonverbal cues is essential for grasping the dynamics within the boardroom. Observing gestures, body language, facial expressions and vocal tones can yield valuable insights into directors’ emotions, attitudes and intentions.

Fostering a supportive environment

The chair is pivotal in facilitating effective group discussions and fostering an environment conducive to optimal board performance, including managing divergent personalities in the boardroom.

Building trust, collaboration and participation among board members through open communication, active listening and mutual respect significantly enhances decision-making.

Frameworks such as Fair Process Leadership, advanced by Ludo Van der Heyden of Insead, emphasise the importance of fairness and robust processes to achieve optimal leadership outcomes.

This approach advocates for effective boards to uphold the principles of fair play, encapsulated in the “5 Cs”: consistency, clarity, communication, changeability and a culture committed to ethical conduct. And this should be supported by good processes (the “5 Es”: engagement, exploration, explanation, execution and ongoing evaluation).

Creating a supportive environment where emotional needs are acknowledged and addressed optimises board performance. Boards should foster psychological safety, enabling members to take risks, express ideas, ask questions and admit mistakes without fear of reprisal.

Good board leadership strikes a balance between having talent and experience and complementing that by learning, practising and refining those skills along the way. By embracing reflective practices, addressing unspoken issues and fostering a supportive environment, boards can become more effective and navigate the complexities of contemporary governance with confidence and agility.

The writer is a Governing Council member of the Singapore Institute of Directors.