Dynamics @ Board-Level
The Financial Times in London has reported that the Chairmanship of the Tesla Corporation is to go to a member of the Murdoch family. The news has been challenged and refuted by current Chairman, Elon Musk, but the real news is the nature of boardroom appointments and the widespread “web of connections” that underpins them.
Contemporary boards are facing increasing scrutiny, not just about their business activities. Increasingly, the very nature of their interpersonal dilemmas and the machinations and intensity of drama involved, are now being exposed. This means that the pressure on boards as a whole, chairs and secretaries to the board is increasing, and the relief does not come in the form of a new projection or spreadsheet. Answers are having to be sought from an inward review of the behaviours and attitudes of those on boards and the nature of the processes that allow boards to review and reflect on their behaviour.
The dilemma faced in working through these interpersonal, and to some extent, intergroup dynamics are made more complex when the people involved also have family relationship. The FT reports that “James Murdoch is currently chief executive of 21st Century Fox, but will leave the role when the entertainment giant completes the sale of the majority of its assets to Disney, and will be succeeded by his brother Lachlan.” Questions of board member independence are intensified when considering the art of balancing the tension between family loyalties and organisational commitments.
On the other hand, there is a good deal of discussion about the role of women on corporate boards and the implications, particularly for City institutions. The only female CEO of a city accountancy firm, Grant Thornton, has this week announced a departure. A dynamic of distrust and dissatisfaction led to her demise. Apparently, Romanovitch had capped her salary at 20 times that of firm’s average pay and had introduced a profit-sharing partnership structure. The FT states that, “The anonymous writer accused Romanovitch of pursuing a “socialist agenda” and that the firm had no focus on profitability under her leadership and was “out of control”.
Romanovitch responded: “A small cadre of partners will find it hard we are making decisions that will depress profits in the short-term but will help profits in the long-term … If profits get unhinged from purpose it might not hurt you now, but it will come back and bite you on the bum.”
These two stories offer a wealth of questions for boardroom practice. What does a socialist agenda mean in the context of the boardroom? How do the International Integrated Reporting Council guidelines affect the behaviour of boards? Do women on boards change the behaviour of men on boards?
Understanding these complex dynamics lie at the heart of becoming an effective board member, Chair or adviser to a board. The Tavistock Institute of Human Relations’ Certificate in Dynamics @ Board-Level programme provides a space where senior board members, Chairs and those who advise or evaluate boards can surface and work through the complexities and challenges in dealing with these issues in the boardroom.
If you have any questions or you would like a brochure for this programme or have any questions, please contact Anabel: email a.navarro@tavinstitute.org.
Programme Directors: Dr Leslie B Brissett and Dr Mannie Sher