Board Directors ARE the problem
This is a ONE THING article, which is featured in FDI’s monthly newsletter. Sign up to receive this in your inbox.
ONE THING is for the busy (speak of the devil) Future Director, in which FDI Founder Paul Smith picks just one thing Future Directors oughta know or do or stew on for the next month. We hope you get something (at least one thing) out of it.
This month’s one thing is one big question: Is the idea of a ‘board director’ stopping boards from being more inclusive?
Let me unpack this.
When you look at the language used around boards, much is wrapped up in ideas of control and command.
I’d argue that one word, in particular, reinforces this. ‘Director’.
Language is just one of the systems that shape our understanding of boards, and how their work is viewed. It’s the linguistic system that frames the role. There are also class systems, power structures (from external to interpersonal), regulatory systems and more.
We think through the lens of these systems every day. So much that we don’t even see them.
Case in point. Imagine we’re building a 50-storey skyscraper for a company's HQ. If I were to ask you on which level the boardroom should be positioned, I guess 99% of you would say ‘the top floor’ without thinking twice.
That’s because our mental model of where a board sits in the hierarchy of an organisation is set in as much concrete as any modern skyscraper. Obviously the top, right?
Maybe not.
Systems Thinking asks us to bring these largely-invisible, subconscious structures into our more conscious attention. So that we might question them. Analyse them. Change them.
So here’s a question. What if our very understanding of boards as the top – the ‘head’ – of an organisation, is one of the structures that needs changing?
This great EY report proposes 3 alternative structures for boards to address their current deficits and future challenges. To summarise:
1) Hybrid. Moderately devolved governance, board + committees aligned to business units.
2) Hub & Spoke. Hard core, soft edges. Board still epicentre but workload is widely shared.
3) Networked. Nodes and satellites linked to stakeholders. Board is a steward responsible for long-term value.
The one I find most interesting is #3. This model sees boards less as “omniscient controllers”, and more as stewards “responsible for monitoring and facilitating long-term value” via satellite structures that pick up on stakeholder issues and feed them into sense-making nodes. These nodes are also given decision-making duties, due to their closeness to where issues emerge from and decisions are felt.
In other words, this kind of board is less of a ‘head’, and more of a ‘heart’, through which everything flows in and out.
[I personally love the body analogy because, at FDI, we don't do Board Evaluations, we conduct Governance Health Checks.]
We need fewer ‘directors’ and we need more ‘stewards’, ‘nurturers’, ‘custodians’ and ‘collaborators’.
Reconceiving governance like this is critical to making boards more systemically inclusive. Because by changing the systems and structures through which boards emerge, we’ll actually be able to change the boardroom.
Go back to that thought experiment from earlier. I wonder how much change we’d see if, instead of building boardrooms at the top of skyscrapers, we started building them right into the lobby.