How do board directors get ahead?
27 March 2018
Keeping up appearances – how do board directors get ahead?
Board directors are becoming increasingly sensitive to their own and others’ social status. The higher an individual’s significance is seen to be, the more it affects decision-making and interaction, and even influences who is invited to join the board in the first place.
Directors with high social status also enjoy enhanced networks, prestige and financial resources, making them more attractive to those from similar backgrounds. This translates into higher compensation as an acknowledgement of social rank.
It is not always directors’ expertise that drives influence within the board, but rather how competent they appear in the eyes of other directors. Patterns of influence emerge, along with a deference to a director’s social status. An expert director with less social status than his colleagues is not always heard in a boardroom.
This perspective suggests that organisations benefit by being associated with those who have high social recognition. Directors with high status influence perception, and individuals tend to be attracted to organisations made up of people with similar social characteristics.
This leads to the question ‘how confident do colleagues feel about raising their concerns?’. Do boards have a culture where colleagues feel safe and confident enough to tackle contentious issues? Alternatively, is director social status and conformity a deciding factor within the board and the dominant way things are done?
Our studies confirm that directors do not feel safe to speak up or challenge traditional ways of doing things. In particular ethical issues need careful and sensitive questioning as they test our moral identity, which makes us more emotional, less effective and vulnerable to self-delusion.
It has been reported that if one attempts to challenge these norms then they may be seen as not fitting into the board. Certain directors are reticent to talk about ideas for improving products, processes, or performance, or questioning the culture of the board and organisation.
Most often this is a result of self-preservation. While it is obvious employees fear bringing up certain issues, such as whistle-blowing, our work has found that directors have a protective instinct that is so powerful, it also inhibits questioning of what is clearly intended to help the board and organisation.
Our studies show that the perceived risks of speaking up are felt to be very personal and immediate to directors, despite the potential benefits. Directors often instinctively play it safe by keeping quiet. This is particularly true when a board has been operating for a long time and any uninvited questioning is automatically perceived as an attack.
Our findings suggest that encouraging others to speak up means that directors need to feel secure enough to be able to usefully contribute. This single important point requires deep cultural change at board level. Nothing will improve until people are better able to address their concerns and place future benefits to the board and organisation before any worries about personal reputation.
To encourage this the chair must explicitly invite and acknowledge others’ ideas, while the CEO needs to actively challenge myths and assumptions that reinforce silence. Ideas are most helpful when they are openly discussed in the boardroom, allowing other directors to help develop them.