Issue 10

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BoardWorks International
Issue 10, 2012

When Do You Know It’s Time To Go?

I recently resigned one of my board memberships. It was a voluntary role I was reluctant to give up being both committed to the mission of the organisation and enjoying the collegiality and fellowship of my colleagues. I resigned with a strong sense of guilt that I was letting people down by pulling out at a time when several others were also resigning. Nevertheless, in terms of my own conscience, I had to face the fact that for various reasons I was not pulling my weight. It was unfair to my hard working, conspicuously more committed colleagues Feeling not a little hypocritical I was also very conscious of the advice I often deliver in workshops. I say to current and prospective board members “you shouldn't be on the board if you can't commit the necessary time to do the job properly”.  Unsurprisingly, my conscience was starting to bother me!

A few days after notifying the chairperson of my decision I came across a reference to a blog which outlined a range of reasons why you should leave a board role (1). The author, Lucy P Marcus, is a UK based consultant and academic on governance matters. She was writing specifically about independent, non executive company directors. The following five reasons she listed that you should consider stepping off a board seem, however, to be more widely applicable.

  1. You’ve served too long

    Marcus suggests there is a finite amount of time that anyone can serve on a board in a truly independent manner. She points to the UK Corporate Governance Code’s guideline on this issue which sets out nine years as best practice. Questioning someone’s length of service is not a reflection on their abilities as board members. It is rather an observation that the longer you are on a board, the less able you are to distance yourself in the manner needed to remain independent. I think of it as becoming progressively more ‘institutionalised’. The longer you serve the more comfortable you become and the less likely you are to question the way things are done. You become defensive of the status quo and the board’s past decisions. Why wouldn’t you be - you have been part of them.  You also become more closely integrated into what is a relatively intimate and valued social system.  Your colleagues (mostly) become your friends. Even when you should, you don’t want to do, or say, anything that might upset them.

  2. Your expertise is no longer required

    Change in a company’s operating environment is constant. Successful organisations shift their priorities and change direction routinely. A board needs people around the table who reflect the experience and expertise needed for today’s and tomorrow’s challenges. Sometimes your expertise and experience becomes dated (be aware when you start saying – or even thinking - “in my day…”). It is quite possible that what interested you about the role, and what the business needed from you, when you first joined the board, no longer exists. This is not about your ability or your past contribution. It is about realising it is time to make way for someone else who is now a better fit with the organisation’s and the board’s needs.

  3. You’re not pulling your weight

    The recognition and other benefits bundled up in the appointment to some boards are seductive. However, I have seldom seen anyone join a board with the intention of just going along for the ride. They genuinely want to make a contribution. The reality is that people’s professional and personal circumstances, and priorities, change. Sometimes, also, your initial interest and commitment simply wane. No-one will be more conscious than you are when you are just skimming the surface of the responsibilities that go with the job. Typical symptoms are missing board or committee meetings, failing to find the time to read and think carefully enough about your board papers, and not participating actively in the meeting dialogue. Marcus’s advice: assume that everyone else around the table has noticed, be honest with yourself about your situation and exit gracefully. This was what I realised had to do in my own situation.

  4. You’re obstructively disruptive

    Marcus describes herself as a strong proponent of healthy, creative tension in the boardroom. It is vital to be able to ask the sort of searching questions that produce answers that broaden and deepen our board’s understanding and the quality of its decisions. Unfortunately, many directors are unable to do this constructively and productively. They use their questions as weapons to be used in a contest with management and/or their fellow directors. Consequently, their behaviour becomes a distraction. As Marcus says, it is one thing to have creative tension but it is another to have an all-out war. Ask yourself if your participation in board discussions has become ego-driven, perhaps overly based on concern for your personal image and reputation. Try to be conscious if the best interests of the organisation and the stakeholders you are there to serve, as a fiduciary, might be taking second place. If there is even the slightest hesitation in your answers you have probably outlived your usefulness.

  5. Your actions, inside or outside the boardroom, bring distraction or disrepute

    Like Marcus, I’ve seen cases of board members behaving in a way that taints everything in which they are involved. Behaviour that has this kind of impact can take many forms: breaching confidentiality, improper use of position (e.g. insider trading), manipulation and bullying, making improper public statements (e.g. of the type that undermine confidence in the organisation or its people). This list could easily be extended. If your other personal or business actions have been publicly questioned, these may bring contention or even disrepute to this board and company as well. Marcus’s advice: do the decent thing and step off the board. Take the risk of collateral damage with you.

    Are there other reasons to go?

    What’s missing from Marcus’s list? There are some obvious things for me. In one sense they are variations on her themes but they are sufficiently different to seem worth mentioning.

  6. There are unresolved differences about strategic direction or the acceptable level of risk.

    There can come a time when you are no longer a believer. The majority of the board want to head off in a direction that doesn’t make sufficient sense to you.  You can’t get in behind and support the necessary actions. It is the executive team’s strategy, not the board’s. You can’t explain, let alone defend, the company’s moves to a third party. These conditions are another sign its time to go.

  7. You don’t have sufficient influence.

    Most normally adjusted people on boards at least want to be acknowledged, to have their voice heard and to (using the old cliché) ‘make a difference’. One of the most tragic things I see on boards is very capable people marginalised because of some characteristic over which they have little or no control. Usually it is connected to anything that makes them ‘different’: their age, gender, ethnicity, their organisational affiliation, the values and perspective of their profession and so on. If you are not being listened to, if you don’t get a chance to say what is on your mind, if you can’t influence the board’s decisions - at least on the things that matter to you - it is time to leave.

    The same is equally true when the board as a whole seems to have insufficient control and influence. This occurs, for example, when the board is little more that a rubber stamp for a dominant shareholder or an overly controlling chief executive. Standing in the dock trying to explain to a judge that the board was just keeping the majority shareholder happy or that it was kept in the dark by the chief executive, is no longer a compelling defence.

  8. You are not enjoying it any longer.

    There are things to do with your board which are beyond your personal control. Changes in board composition are a common example. There is a new member of the board who is a distraction or is even dysfunctional. There is a new chair whose style and approach has made it more difficult for you to make your best contribution. There is tension between the board and the chief executive that you are unable to reduce. There are new shareholders or influential external stakeholders who have changed things that are important for you. There is a new regulatory or funding environment that has created perverse incentives. These are the types of things that can easily change how you feel about the work. Under this heading we should also acknowledge the role of boredom. Do board meetings drag? Does the chair let the meeting wander into all sorts of low level, inconsequential discussions? Do you find it difficult to summon the enthusiasm to prepare for, and attend, the next meeting?

    While the outward signs, and your own internal motivators, may be complex, the message of this article is simple: don’t wait to be told that you have outstayed your welcome.  As a board member who was worthy of your position when first appointed or elected it shouldn’t be too hard for you to figure out the right thing to do — and do it.

(1) http://blogs.reuters.com/lucy-marcus/2012/01/31/youve-got-to-know-when-to-go

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