In the first two parts of our series on trust we explored how to establish trust when starting out on a new working relationship between the board and CEO and how to rebuild trust if it has been damaged. In the last part of our series we will take a look at trust in the relationships within the board.
“You must trust and believe in people, or life becomes impossible.” – Anton Chekhov
The board’s business is governance and we believe at WATSON that dynamics and context have an important impact on how boards safeguard the interests of their organizations that is not always obvious. Trust is the ability to rely on one another, to handle conflict constructively, and to know that the other has the organization’s best interests at heart.
One of the most common areas of conflict at the board level is the working relationship with management, and trust is a foundational factor in making the work together a success. There are other dynamics within the board that can also have an impact on trust and the quality of governance. We will take a closer look at the relationships between directors as peers, as well as between directors and the board chair.
The selection process for directors can differ widely between organizations but one commonality is that directors often come with different perspectives. This happens for a variety of reasons:
- Diversity by design
- Turnover when newer directors join an established group
- Elected directors, who can bring real or perceived partisan obligations
The lack of immediate common ground can undermine trust by amplifying a natural human bias against those outside a group[]. Trust takes time to build and given the fact that boards turn over often, there is always an element of building relationships and trust at any board.
Another potential source of low trust can occur within larger boards, where directors may feel, rightfully or not, that their peers are not pulling their full weight. Research shows that in larger groups, individual group members exert less effort when working towards a common goal[2]. This “social loafing” can be detrimental to group dynamics and lead to a lack of trust.
The board chair has a unique role which can be particularly challenging when there is a lack of trust between the chair and others on the board. Strong board chairs find and continuously recalibrate a delicate balance to ensure the board functions as a whole and acts in the best interests of the organization. A board chair can easily lose the trust of directors who feel unheard, who may be disappointed in their expectations, or who disagree with a board decision.
It can be challenging to recover from a situation where there is a lack of trust within the board and it may take time to build or re-establish trust. There are some practical measures to consider when working towards stronger trust at the board level:
- All directors share a fiduciary duty to the organization and must act in its best interests. Reminding directors of this duty can allow the board to find common ground and a basis for trust.
- High performing boards take into account different perspectives by practicing inclusion. It helps build trust when a board is open to a wide range of voices and styles. Directors or the chair can start small by soliciting the views of others and acknowledging different viewpoints.
- Solid process and structure can help in facilitating conversations and resolving conflict in a constructive way. Consider discussing what consensus means for the board and how it will seek consensus. Ask every director to express their views on a matter, while limiting speaking time. Adopt a template for the board package that requires including all vital information about a matter.
- Set clear expectations and communicate these frequently to discourage “social loafing”. Make an intentional effort to distribute board work and solicit the views of all directors to encourage everyone to make a meaningful contribution.
- When there is an issue within the board that is undermining trust, it can sometimes be helpful to call it out and have a discussion in-camera. Take care that the conversation stays constructive and remains objective, rather than pointing fingers or becoming personal. Prepare for the discussion, provide context, structure, and bring in a strong external facilitator if necessary, to enable the board to have a productive session. If the issue is between individuals, the chair needs to act early to help the get realigned, so that it does not fester or spread to others.
- Some directors may not have experience in the industry or as a director. Providing onboarding and ongoing education to directors can address this and allow newer directors establish trust with their peers.
Fostering, actively building, and maintaining trust are substantial investments that yield rich returns in crisis situations, when a board needs to take pivotal decisions under pressure. It begins with individuals being generous in extending their trust. Start by taking small steps in everyday actions to accelerate the trust in your organization.
Part 1 – How can Boards and Management Collaborate to Build Trust
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