London, 24 July 2017 – Conflict can be damaging, but tension is considered to play a positive role in the boardroom, a poll out today from ICSA: The Governance Institute and recruitment specialist The Core Partnership finds.
‘57% of company secretaries have had to deal with conflict and tension in the boardroom in the past year. With conflict arising from everything from strategic disputes to personality clashes, conflict is one of the thorniest problems that chairman and company secretaries have to deal with,’ says Peter Swabey, Policy and Research Director at ICSA: The Governance Institute. ‘Unconstructive disputes can have serious consequences, such as a board member stepping down or a CEO exiting the business. That said, tension can constructively challenge the board to consider the issues at hand. Diversity of opinion is something to be welcomed as it tends to facilitate better discussions, which in turn lead to better decisions.’
The findings also showed both the chairman and company secretary to play an important part in managing tension and conflict, something that is backed up by separate research that ICSA conducted recently with Professor Andrew Kakabadse of Henley Business School:
- ‘The company secretary should be able to assess the difference between conflict or healthy dissent; it is important for topics, ideas, suggestions, etc. to be robustly challenged.’
- ‘The Chairperson is very important in this in ensuring that everyone's views are heard and the next discussion addresses all the sources of conflict or tension.’
- ‘It is the role of the Chairman to manage any conflict and to have a 'clear the air' session in the next board meeting.’
- ‘The company secretary should work closely with the chair and report any potential issues or conflict so the chair is able to mitigate/investigate.’
- ‘The company secretary should also provide an ear to all members of the board and understand their grievances and issues.’
- ‘In my opinion the company secretary plays a vital role to ensure that any tensions generated by constructive challenge do not develop or degenerate into destructive conflict. To achieve this we facilitate face-to-face conversations and the acknowledging of issues and concerns.’
Discussion ─ often outside the boardroom ─ is highlighted as playing a major role in settling disputes.
- ‘Listening to the other party, acknowledging their concern and conducting constructive discussions outside the meeting to address the issues raised.’
- ‘Discussion outside the meeting and the decision on the controversial issue deferred.’
- ‘Side discussions and mediation outside of the boardroom.’
- ‘Every party listened to each other and each got to explain their point of view.’
- ‘All parties discussed the matter at length and a solution to move forward was found.’
- Ends -
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Notes to Editors:
1 ICSA: The Governance Institute is the professional body for governance. We have members in all sectors and are required by our Royal Charter to lead ‘effective governance and efficient administration of commerce, industry and public affairs’. With over 125 years’ experience, we work with regulators and policy makers to champion high standards of governance and provide qualifications, training and guidance.
Website: www.icsa.org.uk
2 The Core Partnership is a niche market recruitment consultancy working with Company Secretaries and their teams to advise on and resource their specialist interim and permanent manpower needs. With relevant professional backgrounds spanning back to the 1980s, The Core Partnership has a wealth of knowledge of the development and dimensions of the role of the Company Secretary. The team provides market advice on relevant qualifications and experience, conducts salary and benchmarking exercises and works throughout the UK and overseas recruiting at all levels to this specific discipline.
Website: www.core-partnership.co.uk
3 More detail about the poll findings can be found as of 00:01 on Monday 24 July at www.icsa.org.uk/knowledge/governance-and-compliance/indepth/comment/quick-question
The Henley Business School research 'Conflict and Tension in the Boardroom' can be viewed at www.icsa.org.uk/boardroomtension
