ON DIRECTORSHIP is by PETER TUNJIC.

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 a leading voice in the re-discovery of what corporations are and why they exist.

Using Modes to Improve Boardroom Behaviour

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How directors behave has long been recognized as a key factor in predicting boardroom performance and effectiveness.

One popular idea is that certain behavioral types make better directors.  According to Canadian academics Richard Leblanc and James Gillies, "challengers", those who ask the tough questions are essentially good and "critics",  those inclined to destructive criticism are essentially bad.  In all they identify 5 effective and 5 ineffective personality types.

No doubt they're right.  But it's one thing to have the insight and another to get the right personalities on the board.

Fortunately, whilst we might not be able to change behavioral types, research into the concept of "modes" and neural plasticity suggest we can change our type of behaviour.  The good news is that better boardroom behaviour may be closer than the next proxy battle.

Daniel Goleman recently described modes as follows:

"Modes’ are a new concept that lets us understand how and why we actually are diverse people at various times. A mode orchestrates our entire way of being: how we perceive and interpret the world, how we react – our thoughts, feelings, actions and interactions."

But modes are not limited to our personal interactions.  

Modes can be used to improve boardroom behaviour by providing the clue to the right type of behaviour at the right time.  This is new.  The personality type approach can be inflexible.  The challenger tends to challenge and fail to notice that their behaviour is demotivating the CEO.  The concept of modes opens up the boardroom to new solutions to old problems.

Goleman again:

"The liberating effect of thinking about modes rather than 'personality types' is that modes come and go.  We can learn what triggers our modes, what makes some self-defeating ones so sticky, and what can help us loosen their grip and get into the best modes for top performance."

In today's boardroom it's arguable that there is one dominant mode.  It's the control or monitoring mode and it's characterized by intense scrutiny of management and their activities.  But as has been argued recently there is significant downside when the boards thoughts, feelings, actions and interactions are dominated by this one mode.

I propose an alternative set of modes designed to get the boardroom in the best mode for top performance. 

Based on the idea that the board's role is to create value, I've identified four "good" modes of being in the boardroom:

  1. TRADE - In trade mode the board is strategizing and making commitments on behalf of the corporation.
  2. GUIDE - In guide mode the board is guiding and supervising the CEO and other delegates.
  3. HELP -  In help mode directors provide access to resources.  
  4. BUILD - In build mode the board is developing the talent, teamwork and leadership to working each of the other three modes.

The goal is to ensure that everyone in the boardroom matches their behavior to the right mode at the right time.  This includes management and the rest of the directorship team.  I call this process of matching behavior to modes "mechanics" and its critical to good directing and directorship.  

Here's my breakdown of the types of behaviour that match each of the modes for both the board and the CEO.  The "Better Behaviours" are the types of behaviour that, based on my research and reflections, are best suited to the objective of the mode.

So next time a director or the CEO misbehaves ask whether the problem is their behavioral type or their type of behaviour.   If their behaviour doesn't match the mode then you'll experience dysfunction and broken mechanics,

The good thing it's much easier and quicker to improve boardroom performance by changing types of behaviour than trying to change someones personality or waiting for a director to resign or be removed.   A quiet word from the chair to tone down the questioning when the board moves into guide mode can make all the difference to the performance and effectiveness of the board.

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