December 21, 2023
TPL Insights #202 – Influence In The Boardroom And Meaningful Thoughts On Building A High-Performance Board Part 1
By Rob Andrews with italicized content from the article “6 Kinds of Board Members – and How to Influence Them” by Randall S. Peterson and Pedro Fontes Falcao published in Harvard Business Review in December 2023
This article, most of which has been taken from Peterson and Falcao’s December 2023 HBR article focused entirely on influence, makes a strong case for building better boards, which will be the focus of next week’s blog. The authors’ observations over thirty years mirror my own. They highlight the fact that many boards are populated with archetypes who should be avoided altogether, or at least carefully managed. Read this article carefully and stay tuned for next week’s post!
According to the authors, influencing a board requires dealing with a range of players simultaneously. Knowing these types and planning how to influence each can help you maximize your influence in the boardroom. There are many players trying to influence boards. Whether they are senior executives trying to get their ideas heard, consultants looking to sell business, or activist shareholders hoping to change the direction of an organization, they are all looking to influence and persuade the board.
In Peterson and Falcao’s decades of professional experience with boards, they have interviewed and interacted with hundreds of directors and watched others attempt to influence both individual directors and entire boards. They set out to understand why some fail where others succeed and found two interrelated reasons.
First, too many forget that influencing boards is about managing a range of relationships simultaneously. Board-level influence requires taking into consideration the position of each individual director, but at the same time never forgetting that board decision-making is a collective process where it is the truth supported by others — and not just held by one individual — that wins.
The second and related mistake is overly focusing on power. We have seen too many times where consultants and executives spend all their energy persuading a CEO or a chair only to fail at the board level. The people in those two roles are, of course, the most individually relevant and impactful players in the boardroom. But to be successful in influencing the board, one must build a broad coalition of directors.
Influencing a board entails dealing with six different types of directors. Each requires a different set of tactics.
Sadly, narcissists do make it onto boards. When they do, they tend to have unrealistic, exaggerated positive views of themselves; they tend to be preoccupied with their own power and charisma. They love being praised and tend to have little or no empathy for others.
When trying to influence the narcissist, there are two clear challenges. First, they are likely to be enraged when a question or comment may, in their view, call their competence into question. So be cautious in suggesting that they are uninformed or require help in any way. Second, narcissists have little or no empathy for others, so using others as examples is unpersuasive. To influence them they need to be persuaded that the decision will affect them or their reputation. When they make an obvious mistake, you may confront them in a private meeting and explain the threat to their reputation. This is a high-risk situation but is likely your only chance to influence them. If you are persuasive, you will get a positive response, and the narcissist may respect you more. But if you fail, they are likely to get angry at you for questioning their competence.
The Data Chaser
Stories or examples that may help to persuade other types of directors are unlikely to move this one. The data hound will purposefully seek data, even when a casual observation will work — as in seeing that long queues are likely to result in lost customers.
In situations when the issue is best addressed quickly rather than taking the time for a formal study, let the data hound know that some decisions can be made with incomplete data and that moving sooner rather than later in a constantly changing world is critical. Also, remind them that the “perfect is the enemy of great.”
This type of director is typically afraid of or intimidated by the CEO and consequently, is afraid to go against the wishes of the CEO and senior executives. While they may complain to other board members about the CEO’s inflexibility and tough positions in private, they are always publicly compliant. They will never stand alone and probably won’t be comfortable taking a minority position.
The most effective way to influence this type of director is to build a coalition of other board members. Knowing that several others stand with them is key to helping this director feel comfortable in taking a position. To encourage deferential directors to share their honest opinion, other directors should provide them psychological safety by listening to them carefully, acknowledging any questions they raise, and asking for clarification to understand the issues they are raising. Given that most board work is done in committees where it is easier to express opinions, use these sessions to encourage deferential directors to get into the habit of asking questions and expressing their concerns.
The Status Hound
Many directors are concerned with their own status because it has a direct effect on their ability to influence and persuade the CEO as well as other directors. But it is possible to go too far. When such “status hound” directors are the only one with a close personal relationship with the controlling shareholders, they feel highly empowered by that fact and emphasize it at every opportunity. They tend to speak more than others in meetings, even if they are not well prepared, and getting them to admit they are mistaken can be hard.
Any attempt to persuade such directors must be sensitive to their self-perceived status and reputation. So, one should not, for example, try to get them to change their mind on any specific issue. Instead, frame all discussions as new ideas rather than a change of position on that issue. Status hounds are especially persuaded by any idea they know powerful stakeholders will approve.
Some directors hardly ever prepare well for meetings. They are too busy, too important, or overconfident to prepare as others do. They believe that they have the knowledge, wits, or skills to manage participation in the board’s discussions by improvising, many times summarizing or building upon what others have said, or they simply tend to participate less in discussions. When they have to vote, they simply tend to “go with the flow.” These directors often resist written board papers because they prefer to learn through conversation.
Find time for side conversations with them before the meeting to brief them on anything you need them to know. Do not assume they have read anything, but do assume they are motivated to look good in front of others. Help them prepare, which shapes their thinking and allows you to influence them.
The Stakeholder Champion
Sometimes directors have a close affinity to one stakeholder group such as employees, shareholders, unions, or geographies — perhaps because they were selected by those stakeholders. Although directors should take a whole-organization perspective when making decisions, these folks may strive to represent that one group on the board and view all issues and decisions through that lens.
The best way to persuade these stakeholder champions is by helping them recognize that the company’s success can also be important for the group they represent, and work with them to try to look for win-win opportunities for the company and the group. Start by showing that you value their concern about their particular group but explain to them that focusing on the short-, medium-, and long-term impact of decisions requires a multi-stakeholder approach and that no one group can always benefit more or at the expense of others. To help them do this, encourage them to see the benefits for a range of stakeholders beyond the one they think they represent.