As with any management ecosystem the diverse personalities, viewpoints and conversations in the boardroom are as much a source of contention as they are of strength. Managing those qualities can mean the difference between capitalizing on the boardroom dynamic and being at the mercy of it.
For corporate lawyers, the literacy most likely to impact one’s career trajectory is learning to navigate the levels of conversations during course setting board meetings. At the 14th annual SuperConference opening keynote “Managing the Dynamics in the Boardroom” several storied board veterans shared their insights into the inner workings of these conversations.
The panelists—Christine A. Edwards, capital partner, Winston & Strawn LLP; Susan M. Crown, chairman and founder of Owl Creek Partners and vice president of Henry Crown and Company; William K. Hall, founding partner, Procyon Advisors; Sheila A. Penrose, board director at McDonalds Corporation, Datacard Group Jones, Lang, LaSalle; and co-founder and co-chair, Corporate Leadership Center (CLC)—provided audience members with actionable advice on how to better prepare themselves to contribute to chair member conversations.
The personalities of the boardroom often follow a bell curve, Hall noted. While most members are equal parts contributor and listener, there are also those who can run the extremes of over involvement and being overly conservative. Although it may be counterintuitive, Hall said that the outliers are often the voices that can help move the needle.
“Candidly those may be the more important views,” Hall said. And in order to capitalize and move the board away from a “group think” mentality he recommended that counsel push those outliers to contribute, whenever possible. “I insist that on every important decision you go around the table, waiting out the quiet personality and letting them weight in on the subject at hand and let other members of the board benefit from the wisdom.”
But boards don’t operate in a vacuum. Pressure from shareholders and others have a deep impact on operations and conversations at the management level. And especially in the wake of the financial crisis and increasing government scrutiny, regulators play a considerable role in influencing the way that boards operate especially in highly regulated industries like telecommunications and finance. Hall’s advice for coaxing outliers to the table also manifests in his overall view of what makes a general counsel. “To be an effective GC you need to be a good lawyer, but you also need to have an understanding of finance and accounting, and good grasp of group psychology. It’s more than being a lawyers, the trusted counsels I have I can talk to about finance issues or board dynamics and solicit their advice.”
But, regulatory agencies needn’t be a source of ire for the board room. As Penrose points out, “you build a better relationship if no matter what the purpose and agenda of the regulator; you try to make it a constructive relationship rather than a contentious one. This is especially important when multiple regulators take different views and process within a company, and you’re left to deal with the incoherence of that situation.”
While it would be impossible to boil down the struggles of the boardroom to an hour long session, the panel member also addressed the rise of the activist investor, and balancing the points of view of deeply invested members like founders.
This is an area any corporate attorney with aspirations for the GC chair will want to watch.
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