Then there comes the first – or better yet the fourth – meeting of the board following the ![\"\"](\"https:\/\/berkonomics.com\/wp-content\/uploads\/2015\/03\/angry_employee.jpg\")
appointment of a new member.\u00a0 Remember that the board must by law be acting completely on behalf of the best interests of the company, not the investors, in all deliberations of the board.\u00a0 For the first several meetings, all parties usually play nice as they get to know the company and each other.<\/p>\n
The noisy and dominant, or bullying board member<\/strong><\/p>\n Some board members come to the table with preconceived notions about the capabilities of current management.\u00a0 And some board members show their colors in the form of being dominant, hushing their peers and often interrupting others. \u00a0Sometimes this board member or another seems to always change the subject to their own agenda during meetings, including challenging management, sometimes by attacking individuals (called argumentum ad hominem<\/em>), rather than their ideas and statements of vision, fact, or judgement.\u00a0 And some board members are just bullies, alienating the rest in a single sentence or meeting.<\/p>\n Have you been lucky with your board?<\/strong><\/p>\n [Email readers, continue here…]\u00a0<\/em><\/span> \u00a0 If you have never experienced such a board with members out of sync and out of sorts with each other or the rest, you have been lucky.\u00a0 But you have missed one of the great challenges of your business career, depending upon the importance of the board, the size of the company, and the immediacy of decisions resulting from these events.<\/p>\n Who is responsible for taming the beast?<\/strong><\/p>\n If you are the chairman, the CEO or lead director, it is your responsibility to return the group to the core issue and even move to another agenda item if running the meeting.\u00a0 And if that does not work, temporarily adjourn the meeting to speak individually (and alone) with the offending board member out of earshot of the others.\u00a0 Describe how the actions of that person affect you and how you see them harming the board itself.\u00a0 If you get nowhere and you believe your cause to be just and perhaps representative of the group, return to the meeting and air the problem out with the entire board.<\/p>\n And what if the beast cannot be tamed?<\/strong><\/p>\n What about designated board seats? \u00a0Can you change?<\/strong><\/p>\n Designated board seats cannot be changed because of investment documents. In the worst of situations, you might ask another partner of the investment firm for an alternate board member. For non-designated board seats, the solution may be to propose a slate of board candidates without the offending person to present to shareholders for a vote at the next annual meeting, if board members are elected annually.<\/p>\n Alternatively, it is effective – even if confrontational and emotional – to just ask the board member to step down and allow for another to be elected.\u00a0 And if that person is the CEO, the board will find a more effective solution not at all to the liking of the CEO.\u00a0 That too has happened in my board career.<\/p>\n And public boards can be the worst\u2026 My story<\/strong><\/p>\n In one extreme case, I was a member of a public board whose members could not agree on anything substantial, each claiming that the value of the company would be damaged in the market by proposed actions.\u00a0 In this case, the board was not held together by a strong chairman or CEO.\u00a0 I felt it my duty to suggest, then strongly support, discussions about merging with another company, which the board ultimately did.\u00a0 In a merger, egos sometimes dictate who survives at the board level (and at the CEO level), and offending board members from one company are rarely retained.<\/p>\n Preventing a step toward mediocrity<\/strong><\/p>\n Board members can be very professional in comportment and in their exercise of their duties.\u00a0 Or not.\u00a0 Putting up with bullies, or those with obvious conflicting agendas not in the best interest of the company, is a step toward mediocrity.<\/p>\n #Berkonomics\u00a0 #Boardofdirectors\u00a0 #companymanagement #DaveBerkus<\/em><\/p>\n","protected":false},"excerpt":{"rendered":" It happens. Boards are elected by the shareholders, sometimes with preferred shareholders holding seats by right of their investment.\u00a0 In that instance, often the investor selects the board member and the CEO goes along with the choice, mostly out of … Continue reading ![\"\"](\"https:\/\/berkonomics.com\/wp-content\/uploads\/2018\/01\/bad-lawyer-300x166.jpg\")
What if the person continues with his or her personal agenda or continues to disrupt?\u00a0 I have had this experience more than once.\u00a0 The solution I chose was to approach the VC, or another partner of the angel group, and explain the problem.\u00a0 I would do this only if the problem was seen in consensus by the rest of the board.\u00a0 In one instance, this brought about a replacement board member much more attuned to the duties and culture of the corporation.\u00a0 In the other, the offending board member did back off in subsequent board meetings.<\/p>\n