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4:02 AM 12th June 2021
business

Book Review: The Good Governance Guide To Boardroom Dynamics

The Good Governance Guide to Boardroom Dynamics by Jeremy Cross and Sue Lawrence is published by CGI (the Chartered Governance Institute).

The author, Dr Jeremy Cross is a Chartered Psychologist, author, educator and leadership consultant who has worked with over 75 organisations across a wide range of sectors and provided personal coaching to over 100 senior leaders. Jeremy is a regular conference speaker on various board leadership topics and is a former visiting Faculty Member of Henley Business School.

The editor of this book and the ‘Good Governance Guide to’ series, Sue Lawrence, is an experienced independent director, holding board, trustee and committee positions in the UK for over 15 years. Sue is a Chartered Director with the Institute of Directors and founder of Independent Directors and Trustees Limited.

Jeremy and Sue’s book, The Good Governance Guide to Boardroom Dynamics aims to provide a comprehensive introduction to the broad depth of good governance and board effectiveness.

The book achieves its objective and is an excellent guide to governance and board dynamics which is strong on theory but brimming with case studies, diagrams and four-box matrixes to help bring theory to life.

This is not an easy read if you try to read cover to cover but is an essential resource if you are forming a board or just want to ensure an existing board is fit for purpose.

It tackles the subject by splitting into three parts. Part One outlines the need for understanding and application of board dynamics. Part Two covers what exactly this involves and Part Three delves into the practical side of applying the thinking. The layout is designed to be thought-provoking and bring the subject back to personal plans of action.

The book starts by describing the history of UK corporate governance starting with the Cadbury Commission in 1992. This defined the four responsibilities of the board as 1. Setting strategic aims, 2. Using leadership to implement these aims, 3. Supervising management and 4. Reporting to shareholders. The book goes on to describe the evolution of corporate governance and provides a wealth of examples of what can happen when good governance principles are ignored or wrongly applied.

The book provides considerable focus on board structure and the importance of a good corporate culture. It gives great insight into the diversity of a board, not just on gender and ethnicity, but also on experience and background. It asks the question, “is the individual capable of being a director on this specific board?”, surely an essential question to be considered but sometimes not enough cognisance is given to this question.

Part Two, Understanding Board Dynamics is the weightiest section of the book, starting with a chapter on the psychology of the board. It explores the concepts of “working groups vs, teams” There are many variations of structure but the book describes the fundamentals of efficient and effective boards and the essentials required to achieve good governance.

This section tackles topics, such as cognitive bias and how to mitigate its effects. The book talks about personality types and the benefits of diversity from this perspective. There is a valuable section on decision-making tools which is extremely helpful.
The book describes the difference between boardroom dynamics and board dynamics. Boardroom dynamics refers to the interactions board members individually and collectively in the boardroom. Board dynamics includes this definition but also considers how boardroom dynamics influence and are influenced by the wider stakeholders.

The book addresses some of the key dynamics of independent challenge and board conflict. The avoidance of ‘group-think’ and failure to consider all options and potential consequences is a paramount issue for the board and board members. The book tackles how to challenge well in the boardroom and gives some valuable suggestions on how to challenge constructively and ensure a range of views and perspectives are at the heart of decision-making processes.

The section on meeting design on boardroom dynamics is particularly revealing. The book gives examples ranging from an American billionaire hedge fund founder to a 5th century BC Chinese general. The book gives guidance and advice covering such mundane topics as time of day, use of breaks and meeting duration. However, these factors can have a genuine impact of the quality of outcome. The criticism “meetings for meetings sake” is often heard but surely it is the attendees who have the opportunity to ‘call out’ these failings and this book gives ammunition to help improve meeting design and is relevant to both board meetings and other management meetings.

Some of the most helpful sections in the book are in Part three, effecting change in the boardroom. Perhaps the most important challenge to a board is continuous improvement and board evolution. Today’s effective board can become ineffective if the board isn’t seeking to keep up with changes in the business, the market and the business environment. New entrants can disrupt the status quo and a board must be nimble and yet this can be difficult to achieve.

Achieving change in the boardroom starts with leadership and leadership influence. Those supporting the board or sitting alongside it require the ability to be strategic leaders as much as those sitting around the boardroom table. They influence the strategic direction of the board.

Talent management is an ongoing responsibility for a board. Having the right mix of knowledge, experience, perspective and influence is critical to an effective board and leading to good governance. It is no longer sufficient to replace like-for-like each board replacement or addition but it is an opportunity to improve the diversity of thought to a constantly evolving board.

I enjoyed this book and found it a real refresher for things forgotten and a great introduction to new concepts and practices to develop an efficient and effective board.

Next week Sue Lawrence contributes to our Saturday Essay looking at the increasing importance of boardroom dynamics
Ian Garner
Ian Garner
Ian Garner is Vice-Chair of the Institute of Directors in North Yorkshire. He is a Director at Practical Solutions Management, a strategic consultancy practice and a Patron at ExportExchange, part of Leeds City Region Enterprise Partnership.

Ian has over 10 years’ experience in strategy and business development with international healthcare organisation Bupa across Australia, Europe, North America, West Africa and South East Asia. He spent 20 years in retail management with travel company Thomas Cook and five years in sales and relationship management roles with Travelex, the leading international foreign exchange business.