IMHO: Bullying on boards - let’s talk about it

What do you do when a fellow director comes to you for help because they are being bullied on their board?

Well, I think you have an obligation to help. My quandary was that I have never consciously observed bullying on boards. Nevertheless, I provided counsel and contributed to a process, the outcome of which was the resignation of the director who was being bullied.

This outcome did not sit well with me as I thought the process was fraught. I was also concerned that bullying had happened on my watch, unconsciously. Media reports of bullying at AUT, NZ Police and NZ Growth Partners also confirmed to me that this behaviour should not be tolerated by our society.

So I approached IoD President Alan Isaac who supported my wish to hold an IoD webcast to talk about bullying on boards. I was joined by IoD Auckland branch manager Jill Steffert and Sarah Sinclair, chair of MinterEllisonRuddWatts. We were genuinely surprised that during the Q&A session in the webcast that many participants, including a board chair, disclosed that they were being bullied, and asked for help.

I hope that this article, as a first step, raises director consciousness of bullying in all our respective board discussions.

How is bullying defined?

WorkSafe NZ defines bullying as “repeated and unreasonable behaviour directed towards a worker or group of workers. It can lead to physical or psychological harm.”

There are no statistics available on bullying on boards so it is unclear as to its prevalence. It is also unclear whether certain boards are more likely to experience bullying, eg for profit vs not-for-profit, public vs private, listed vs unlisted, small vs large. An IoD survey would help gauge the extent of the problem.

Sources of bullying on boards

The allure of a directorship can be strong. Directors may perceive themselves to be at the peak of an organisation. In reality, directors also have a boss, whether shareholders or trustees, or whoever appointed them. Nevertheless, perceptions may dominate director behaviour.

The search process leading to your board appointment may have involved due diligence going from a long list to a short list, then interviews based on your CV- including education, board and/or industry experience, technical skills, criminal record etc. You will also have completed due diligence on the entity and its directors. However, it is very unlikely that a deep dive into your behaviour or the behaviours of others on your board will have been undertaken.

You now find yourself appointed and part of a collective entity - the board. You quickly realise that you should not be a team of individuals but an individual team. A good group dynamic allows a board to consider all perspectives and arrive at a collective agreement.

Skill sets that are very important for good group dynamics are listening, considering, reflecting, searching, respecting, learning and agreeing. These are not necessarily the skills considered when you were selected for the board.

You now find yourself with a group of people you don’t really know. What are their personalities, their knowledge and experience, their IQ/EQ, and are they an extrovert, introvert or ambivert? Do they have the requisite group skills? Who chose these people? And, how will you contribute to this collective?

You also discover that directors are not equal, despite base director fee parity and equal liabilities. Board structures matter. On large boards the chair, deputy chair, head of audit and risk, head of remuneration and nominations and in some cases overseas-based directors are paid more and are in receipt of different information at different times from other directors. There is the potential that different board positions, access to information, and power can all drive errant behaviour.

In summary, the failures that can lead to bullying are a failure to understand your own and others personalities, a failure to have or acquire the requisite soft skills that contribute to good group dynamics, and a failure to ensure board structures do not exclude directors.

Healthy conflict

The quality of board-level team dynamics should be correlated with an organisation’s performance. Examples of healthy conflict include constructive dissent, thoughtful challenges and contributions made with respect. Unhealthy conflict examples include the desire for control by one or more directors, interpersonal issues, factions, poor communications, an ineffectual or a risk averse chair; and a lack of clarity of roles and responsibilities.

Unhealthy conflict can elicit poor behaviours such as being inconsiderate, uncivil, belittling, blaming, and withholding information.

Remedies - if you are bullied on a board

Let's assume you are on a board but not a board committee. Board information is unevenly distributed and you do not feel you are provided with the same information other board members receive. You voice concern over the direction of the entity based on the information you do have, but you are not “heard”. One of your fellow directors resigns with no clear reason given. The chair allows the situation to continue. You are now a director with a perception you are being unfairly excluded and develop misgivings about your ability to contribute effectively on the board.

What are your options?

1. You engage with the chair, but it is clear they are part of the problem.
2. You seek counsel from other directors, but a sympathetic colleague has just left and the others don’t see what is wrong. You feel that you belong to a diminished “B team”.
3. You seek external advice from fellow directors in your network. They confirm that your fellow directors are “interesting” and questioned why you didn’t do due diligence on them before taking on the role.
4. You call the IoD but there is currently no formal written policy/guidance for bullying on boards. However, they recommend engaging in a mediation process.
5. You enter into mediation using an independent counsel funded by the entity. But it is your perspective against the remaining directors. You then consider legal advice.
6. In seeking legal advice you discover that employment law does not cover you because you are not an employee. There is no case law precedent for bullying of directors. Acts of Parliament such as the Harassment Act, Human Rights Act and Crimes Act are cumbersome and difficult to apply to your situation. A legal case will therefore be expensive with highly uncertain outcomes.
7. You can stay on the board until your tenure expires but this is uncomfortable and may create further dysfunction on the board.
8. So you resign with a “thank you for your services and best wishes for the future” letter. That is a poor outcome as the problem remains unresolved and you are not certain that a directorship career makes sense any more.

The best remedies are preventative 

• You need to understand who you are as a person. What is your personality? What serves you well? How strong are your soft skills? What do these mean for how you show up around a board table and how you interact with others? What patterns do you need to replace to help you become a valuable desired director?
• You do need to conduct similar due diligence on the other people around the board table. Talk to experienced directors about their experiences with other members on the board. If the adjective “interesting” is used to describe a prospective fellow director, a red flag should go up.
• Does your prospective board have a statement on values, a code of conduct or a code of ethics? Are behaviours monitored against these standards by way of a roundtable comment at the end of each board meeting and/or by way of a formal annual review?

The way forward

This is not an easy topic to raise but talking about it is an important start. Measuring the extent of our bullying experiences should be next. I believe that consciousness will create impact and lead to change. And it will provide directors with a professional mandate to identify and change unacceptable behaviour.

About the author

Craig Stobo CFInstD is a professional director and business owner. He has worked as a diplomat, economist, chief investment officer and CEO. Outside of work, he has climbed mountains in NZ, Peru, Pakistan, and Nepal and enjoys skiing, sailing and competes in ocean swims.

The views expressed in this article do not reflect the position of the IoD unless explicitly stated.

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