Boardroom Dynamics and Challenges – From a Chairman and NED Point of View
Having interviewed Neil Davidson, CBE, NED at Morrisons Supermarket Group and Chairman at Produce Investments PLC, following a NEDonBoard panel evening, there are some clear skills and considerations which best enable a board to work effectively and harmoniously, and for NEDs to connect with fellow board members and carry out their roles and responsibilities.
What sets apart a well-functioning board vs. a dysfunctional one?
A: Well, I think a lot revolves around the quality of the chairman. But around the boardroom table, the dynamics need to be right, and also the structure of the board. The balance between executive directors and non-executive directors [needs to be right] as you don’t want to balance the wrong way. In terms of board dynamics, the role of the chairman is absolutely key. And obviously, the choices of the non-executive directors themselves.
It’s quite a skill being a non-executive director because you are non-executive, and there is a big difference between non-executive and executive, and there’s a big difference between spending 1% of your total time in a business, which is typical for a non-executive director, versus somebody who’s spending 100% of their time.
You can’t hope to know everything, but you’ve got to have the skill to detect the dynamics of the group, understand where the company actually sits, and read between the lines. But a lot of the dynamics revolve around the quality of the chairman and the social interactions that he’s able to deal with.
What frustrations or challenges can exist for non-executive directors?
A: Well, you’re very much dependent on the executives for clear information, which is part of the role of the chairman to make sure that that is timely and accurate. But also, your instincts might tell you that ‘I don’t feel comfortable with what I’m being told’. ‘I don’t feel comfortable with this strategy’. With that 1% of the time you’re spending in the business, you need to be absolutely clear that you know what you’re talking about. And that is a big challenge for a good non-executive director.
In a follow-up article we share Neil Davidson’s interview addressing interesting facts about being on the board of a larger company.
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