The Human Side of Governance: Rethinking How Boards Work Together
Corporate boards aren’t just about ticking boxes – they’re complex social ecosystems. Loretto Leavy and Ruth Sealy explore how ‘board behavioural dynamics’ could be the missing link in making governance genuinely effective.
Poor people processes on corporate boards, such as a lack of engagement by directors, ineffective leadership or groupthink have been blamed for several major corporate failures over the past decades.
Beyond skills: what makes boards effective?
Research made clear that team effectiveness is derived equally from the knowledge and skill individuals bring to decision-making tasks and the people processes that impact how they act effectively together.
“Research made clear that team effectiveness is derived equally from the knowledge and skill individuals bring to decision-making tasks and the people processes that impact how they act effectively together.”
Yet while the UK Corporate Governance Code (UK Code) provides useful parameters of governance, neither practice nor academia adequately describe how members of corporate boards cohere as increasingly socially complex groups. Nor is it clear what roles should be played by the board chair, senior independent director (SID), company secretary and nomination committee (NomCom) in enabling the processes and practices of that coherence.
Introducing ‘board behavioural dynamics’
We coined the term ‘board behavioural dynamics’ to describe a corporate board’s ability to come together effectively as a collective decision-making body.
What we found: boards are not static
Taking a practice-centric perspective, we initially examined corporate governance disclosures of 50 of the UK’s largest organisations listed on the London Stock Exchange, and found substantial inconsistency in reporting. Findings illustrate that boards are not static entities, and that in addition to the skills and diversity of directors reported, core elements of the board encompass interpersonal relationships, structures, contextual pressures and actual and expected outcomes. This requires a more nuanced understanding of the board ecosystem.
Key people processes
We identified six key people processes influencing the construction and functioning of the board:
- Appointing
- Inducting, training and developing
- Evaluating and acting
- Succession planning
- Composing and designing
- Reappointing
“We identified six key people processes influencing the construction and functioning of the board.’”
Crucially within each process, we identified three levels of maturity which reflect proportional responses to each board’s underlying ecosystem. Mapping the six processes and three maturity levels allows boards to identify the approaches that are proportional to their market environment, their organisational and strategic challenges and their board-specific pressures and performance. This is summarised in Table 1.
Validating findings
We then validated our initial findings with highly regulated organisations across different jurisdictions, through 14 detailed workshops and a two-month open consultation. This enabled us to reduce the gap between what is observed in reporting and how processes play out in practice. Over 600 practitioners engaged in the process, predominantly company secretaries, board directors, board evaluators, board chairs, advisers and search executives.
Global appeal
The Corporate Governance Institute of UK & Ireland (CGIUKI) supported our work and collaborated with us, publishing several magazine posts outlining details of the board behavioural dynamics processes. The UK Code is taken as best governance practice around the world and our project has also seen engagement from the CGI’s partners in Zimbabwe, New Zealand and Hong Kong.
“The Corporate Governance Institute of UK & Ireland (CGIUKI) supported our work and collaborated with us, publishing several magazine posts outlining details of the board behavioural dynamics processes.”
Launching our handbook
The result is our handbook Board Behavioural Dynamics, an open resource, which we launched at the CGI’s annual conference in London in July 2025.
Supported by the CGIUKI, the handbook outlines new understanding and guidance on the roles of the chair, the SID and the NomCom in ensuring proportional processes and practices that will enhance the board’s ability to act effectively as a collective decision-making body.
Continuing the evolution
With a clear framework now available, boards will be able to approach people processes systematically and intentionally, opening up further considerations on board development. We will continue to investigate the human side of governance to understand the impact of leadership decisions on how the board works together.
Table 1
Processes | Maturity levels influenced by proportionality | ||
Baseline | Developing | Adapting | |
Appointing | Agency-led recruitment of directors. | NomCom-led processes with agency or open adverts, aligned to current and future skills needs. | NomCom-led processes with agency or open adverts, interlinking with other process findings. Balance of strategic skills and interpersonal relationships. |
Inducting, Training & Developing | Legal, governance and regulation focused. | Structured programmes with strategic and operational insights, plus legal and regulatory contexts. | Structured programme with active business engagement for succession, culture and decision-making insights. Improved from feedback and wider contextual views. |
Evaluating & Acting | Board reviewed, occasionally including committees. | Board committee and directors reviewed with a focus on current year actions. | Board committee and directors reviewed with a focus on current and prior year actions. Director objectives interlink with other processes. Board and committee observations. |
NED Succession Planning | Focus on tenure rotation of NEDs. | Scheduled rotation gaps reviewed against strategic requirements. | Scheduled rotation gaps reviewed against strategic and interpersonal requirements with three time horizons planned. |
Composing & Designing | Skills, diversity, time availability, interests and structure position statements. Implicit reviews. | Skills matrix focus on balanced strategic needs. Diversity, time availability and interests assessment. Structure position statement. FTSE diversity policy: recruitment and succession actions plus target. | Skills matrix focus on balanced strategic and interpersonal needs. Diversity, time availability and interests assessment. Structure position statement. Explicit plans to address gaps. Interlinking with other processes. Additional reviews when significant issues arise. |
Reappointing | Reappointment until maximum tenure limits. Non-renewal only due to director time limitation. Implicit reviews. | Input from director reviews. Reappointment or not due to fit with skills and future strategy. | Decisions are culmination of other behavioural dynamics processes. Reappointment or not due to future strategic skills requirements, interpersonal relationships and structures. |
Table 1: Board behavioural dynamics maturity matrix © Leavy & Sealy 2025
Authors
Professor Ruth Sealy
Professor of Leadership at Henley Business School
Ruth Sealy is a Professor of Leadership at Henley Business School. Ruth researches behavioural corporate governance, including boardroom dynamics and strategic inclusivity, women on boards and leadership.
See Ruth's profileLoretto Leavy
PhD in Leadership, University of Exeter
Loretto Leavy has worked as a company secretary to boards of complex organisations for two decades across sectors and jurisdictions, focusing on financial services in the last decade. She is completing her PhD in Leadership at the University of Exeter, researching board behavioural dynamics, while working part time as a Group Company Secretary.
