Quick Question: Building trust

This month’s survey looks at the dynamics in boardrooms and issues that are hard to address.

How would you describe your relationship with the board?

When you have a board evaluation, do you include consideration of the dynamics of the board?

The first question explored board dynamics and interactions between directors. Of the three responses available, 15% stated their board were ‘passive’, 85% replied ‘assertive’ and fortunately no-one described them as ‘aggressive’.

When asked ‘how would you describe your relationship with the board?’, the majority (86%) responded that it was ‘positive’, 12% replied that it ‘needs improvement’ and 2% said it was ‘negative’.

A key factor in emotional intelligence is establishing trust. Respondents were asked to rate out of ten how much they trusted their board. The average score was 8.5. Ratings for how much the board trusted respondents averaged 8.3 out of ten. These responses demonstrate mutual trust.

82% said that boardroom dynamics were considered in board evaluations, 8% said they weren’t and 10% reported no board evaluation had taken place.

Of our respondents, 11% said that either they or the nomination committee had received training in emotional intelligence, but the majority (61%) had not. Of the remainder, 25% said it had not been considered, and 3% said that it was not felt to be required. A lack of emotional intelligence can hinder a board’s ability to problem-solve and make informed decisions so training in this area is recommended.

When asked, ‘have you ever had to speak up on a subject or problem in relation to the board?’ 56% responded ‘yes’, 32% responded ‘no’, 5% said they ‘have not felt comfortable to do so’, and 8% said they have ‘been asked not to intervene’. We would encourage governance professionals to find a way to strengthen their position as an adviser.

Our last question related to difficult conversations for company secretaries in relation to the board. Common answers included remuneration and expenses policies, addressing the dynamic between executive directors and non-executive directors, or the CEO and chair, director performance and contribution and addressing behaviour outside of board meetings where interactions are not always witnessed or recorded. The other issue reported as being challenging was establishing the importance of good governance practices and the value of the company secretary as an adviser. To some, governance advice may seem unnecessary, but the implications of getting it wrong can be significant.

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