Mar 272014
 

Does your board have directors who trust each other, are committed, are comfortable with conflict, hold each other to account and are focused on results?

is your board dysfunctionalIf not, your board is likely to have some degree of dysfunctionality and is possibly in need of an intervention.

Excellencia has been working with boards of organisations of all sizes in all sectors for a number of years and most of them exhibit some degree of dysfunctionality when analysed using our board evaluation and diagnostic tool which is based on the book by Patrick Lencioni, The Five Dysfunctions of a Team.

If there is no trust on the board, directors will:

  • Conceal their weaknesses and mistakes from one another.
  • Hesitate to ask for help or provide constructive feedback.
  • Hesitate to offer help outside their own areas of responsibilities.
  • Jump to conclusions about the intentions and aptitudes of others without attempting to clarify them.
  • Fail to recognise and tap into one another’s skills and experiences.
  • Waste time and energy managing their behaviours for effect.
  • Hold grudges.
  • Focus time and energy on politics, not important issues.
  • Dread meetings and find reasons to avoid spending time together.

In a dysfunctional board, directors fear conflict, they will have boring meetings, create environments where back-channel politics and personal attacks thrive and ignore controversial topics that are critical to board success. They will also fail to tap into all the opinions and perspectives of board members and waste time and energy on posturing and interpersonal risk management.

In addition, a board that fails to commit to being a team:

  • Creates ambiguity among the board about direction and priorities.
  • Misses opportunities due to excessive analysis and unnecessary delay.
  • Breeds a lack of confidence and fear of failure.
  • Revisits discussions and decisions again and again.
  • Encourages second-guessing among directors.

Dysfunctional boards are unable to create clarity around their direction and priorities and cannot align directors around common objectives. They move forward with hesitation and are unable to learn from mistakes.

Further, a board that avoids accountability:

  • Creates resentment among directors who have different standards of performance. Encourages mediocrity.
  • Misses deadlines and key deliverables.
  • Places an undue burden on the chairman as the sole source of discipline.
  • Does not ensure poor performers feel the pressure to improve.
  • Does not identify potential problems quickly by questioning one another’s approaches without hesitation.

Finally, if a board is not focused on results, the organisation will stagnate or fail to grow, rarely defeat competitors, lose achievement-oriented employees, be easily distracted and encourage individualistic behaviour where board members focus on their own careers and individual goals.

So what should boards be doing?

Directors who can agree with most of the following are likely to be sitting on more effective boards:

  • Board members are clear on what is expected of them.
  • Board meeting agendas are well planned so that the board is able to get through all necessary board business.
  • Most board members come to meetings prepared.
  • Written reports to the board are received well in advance of meetings.
  • All directors participate in important board discussions.
  • Different points of view are encouraged and discussed.
  • All directors support the decisions reached.
  • The board has a plan for the further development of directors.
  • Board meetings are always interesting and frequently fun.

How many of the above statements were you able to agree with?

If you disagreed with a number of them, the likelihood is that you are a member of a dysfunctional board … If your business has a dysfunctional board, it is also likely to be a dysfunctional business.

Call 01173 827 820 now or e-mail david.doughty@excellencia.co.uk to find out how Excellencia can work with your board to make it more effective

Mar 272014
 

Independent review of board governance by Deloitte finds serious problems at Rotherham NHS Foundation Trust

board governanceThe board running a debt-ridden NHS trust was “dysfunctional”, “ineffective” and “severely fractured”, according to the sharply critical findings of a formal review previously withheld from the public.

Some directors at Rotherham Hospital engaged in “inappropriate conduct” that was required to “be addressed as a matter of priority” with the report also stating the chaos was “having a detrimental impact on the health of the Trust and remedial action should be taken immediately.”

The review was told some non-executive directors (NEDs) were “behaving irascibly, indiscreetly, impulsively and surreptitiously” with staff reporting “feeling intimidated” by one, unnamed NED. During one meeting the NED was said to have “kicked a chair and banged their fist on the table.”

Rotherham NHS Foundation Trust previously refused to disclose the contents of the independent review of board governance by Deloitte following a freedom of information request from the Yorkshire Post.

But the Trust relented after a complaint was made to the Information Commissioner and has now released most of the review, although a small number of key passages are still redacted.

The report, completed last July, detailed an array of failings at the top of the Trust where financial mismanagement led to senior executive roles being taken over by private consultants at a cost of £1.5m to the public purse.

Drawing on interviews with directors, staff surveys and observing board meetings, it concluded: “The Trust Board is dysfunctional and ineffective”.

“Relationships at Board-level are severely fractured and strained at present. We do not believe that the situation is recoverable and are of the opinion that on balance the NED (non-executive director) cohort should be urgently refreshed.”

One director told the review: “This is the most dysfunctional board I’ve encountered.”

Another said: “There is mistrust. People are not honest with one another because if it not a safe place to be.”

Monitor, which regulates NHS foundation trusts, intervened in the management of the Rotherham trust in February last year, which led to the controversial involvement of private firm Bolt Partners in running the hospital.

But the review found that “members of the Board do not appear to be aware of the Governance Plan submitted to Monitor in March 2013 as part of the licence conditions.”

It said: “The underlying reasons behind the breakdown in Board relationships are complex and multi-factorial, but appear to centre around a lack of clarity and behaviours that are perceived to be inappropriate.”

At one point the review raises the issue of some, unnamed directors’ outside interests and an apparent failure to formally declare them as required.

It says: “Whilst we accept that the advice given to NEDs (non-executive directors) in relation to declaring and managing conflicts of interest may have either been non-existent or ambiguous, for the avoidance of doubt, we are of the opinion that all instances at the Trust relating to outside interests that have been reported to us are a breach of commonly known and accepted governance standards in public life”.

“It is beyond the scope of this report to determine whether individuals have a case to answer but as a minimum the Trust’s policies relating to disclosure should be urgently clarified and all Directors should be required to sign a Code of Conduct stating that they have read and agree to abide by the Code.”

A section on the behaviour of NEDs included a series of examples of “inappropriate conduct”.

It said: “One senior manager stated that, ‘Directors that aren’t present at the meeting will be openly criticised by X (NED)’.

“Staff reported that, ‘NEDs go behind your back to gather information’ and, ‘The NEDs try to gather information to attack the EDs (executive directors)’.”

On another occasion staff reported being told by a NED: “The Trust is skint.”

The report went on: “A member of staff commented, ‘They pick on a person in the room and grandstand in front of the others’.

“People have reported that the consequence of this style is that people do not want to attend meetings and will only share the information that they need to.”

Other examples of behaviour remain redacted by the Trust.

May 142013
 
excellencia Is your board

Fit for Business?

FootAnstey
0_392x260_images_stories_fotolia_15486542_lFind out how you can add value to your business with a corporate governance health check

Wednesday 22 May 2013, Foot Anstey, 100 Victoria Street, Bristol BS1 6HZ 5:30pm to 8:00pm

Come along to this Free event organised by leading law firm Foot Anstey and leadership development company Excellencia to find out how good corporate governance can add value to your business.

If you are the Chair, Chief Executive, Finance Director or Company Secretary of a growing business then this event will help you to understand how you can assess the effectiveness of your company’s board and the value that qualified independent non-executive directors can add.

Programme:

17:30 Registration and networking
18:00

Welcome from the Chair and introductions

Judith Levy150 Judith LevyGroup Chairman, Vistage
18:05

Good corporate governance makes good business sense

 BoD_steve-hill150 Steve HillChartered Director, Managing Director at Systems Engineering and Assessment Ltd. Bristol
18:25

Company Secretarial  compliance –the benefits

 SimonLevington150 Simon LevingstonConsultant – Foot Anstey. Chartered Secretary in Public practice providing advice & support to directors and companies
18:45

Having an independent Non-Executive Director on your board is essential for growth

 BFoss150 Bryan FossIndependent Non-Executive Director, Risk & Audit Chair, Board And Business Development Adviser, Visiting Professor Bristol Business School
19:05

A dysfunctional board means a dysfunctional business

 DD150 David DoughtyChartered Director, Chief Executive at Excellencia
19:25 Refreshments and networking
20:00 Close

VistageIoD logo plain Although the event is free, places are limited – to book your place on-line now click here

Jan 152013
 

Board evaluation including Director 360

A well-conducted board evaluation helps the Chair to:

  • assess the balance of skills within the board;
  • identify attributes required for any new appointments;
  • review practices and procedures to improve efficiency and effectiveness;
  • consider the effectiveness of the board’s decision making processes;
  • recognise the board’s outputs and achievements.

The UK Corporate Governance Code recommends that boards should undertake a formal and rigorous annual evaluation of their own performance and that of their committees and individual directors. The board Chair should act on the results of the performance evaluation by recognising the strengths and addressing the weaknesses of the board and, where appropriate, proposing new members be appointed to the board or seeking the resignation of current directors.

Individual evaluation should aim to show whether each director continues to contribute effectively and to demonstrate commitment to the role (including commitment of time for board and committee meetings and any other duties).

The excellencia Board evaluation program including Director 360 consists of 4 elements which can be accessed separately or combined to form a tailored program of facilitated support for the Board as it considers its strategic effectiveness and capability to meet future challenges.

  1. Board evaluation including Director 360Board effectiveness questionnaire – on-line questionnaire completed by all board members individually giving directors the opportunity to compare their own assessment of performance and contribution with that of their peers. Working with the Board Chairman, we select the most appropriate evaluation questions for the questionnaire which will cover the following:
    • Self-assessment of Board effectiveness
    • Self-assessment of individual contributions to the Board
    • Director 360 – 3600 Assessment of the contributions of fellow directors to the Board including the effectiveness of contributions across a full range of issues, willingness of individuals to take a lead on issues including those outside their direct area of responsibility, and the ability to keep up to date with new issues and bring them to the attention of the Board where appropriate.
    • Director 360 – 3600 assessment of Board behaviours including: listening, constructive challenge to others, conflict avoidance, openness to challenge and building a consensus

    Analysis and Feedback from the Board effectiveness questionnaire is presented to the Chairman of the Board to enable him or her to feedback the results of the Director 360 to individual directors confidentially prior to the facilitated presentation of anonymised results to the Board as a whole.

  2. Facilitated Strategic away day– provides an opportunity to assess the effectiveness of the Board in determining the organisations’s strategic goals. Typically, the day will include:
    • Refresh of the organisation’s vision (Postcard from the future)
    • Factors which might impact on achievement of the vision (Three Horizons)
    • Capability to deliver current strategy / business plan (Board Succession Plan)
    • Discussion of the organisation’s values
    • Strengths, Opportunities, Weaknesses and Threats (SWOT analysis)
  3. Observed Board – a structured observation of a regular Board meeting to objectively assess Board effectiveness and individual contribution. The report is presented to the Board Chairman to enable him or her to feedback the observations to individual directors confidentially prior to the facilitated presentation of anonymised results to the Board as a whole.
  4. Board Development Plan – a detailed board and individual development plan to enable the findings from the evaluation process to be converted into a tailored programme of individual and collective development activities. The plan will include formal learning programmes, individual and team coaching and mentoring.

The Excellencia Board evaluation process consists of the following steps:

  1. Design the on-line evaluation questionnaire. We will work with the Chair, using a set of template questions, to create a tailored evaluation questionnaire for the board, Template questions can be modified or new questions can be created as required.
  2. Board members complete the questionnaire on-line. Once invitations have been circulated by e-mail to board members, the Chair is kept informed of progress and notified of any outstanding responses.
  3. Analysis of questionnaire responses. We analyse the questionnaire responses and present them to the Chair so that they can feedback to the board members individually before the anonymised results are presented to the board.
  4. Identification of further development. Working with the Chair we identify what further development is required for the board.

To find out how the excellencia Board evaluation program can measure and improve the effectiveness of your Board contact David Doughty (david.doughty@excellencia.co.uk) or call 01173 827 820