The number of board directors is set based on the organization’s needs. The plan is to have a diverse group of active board directors where many perspectives come to the table in the interest of setting the stage for the best possible decision making. When boards plan for a well-rounded, expert board composition, all generally goes well, and the organization also performs well. Can one poorly performing board director have much bearing on how the rest of the board performs? In a word — yes. Even one board director who doesn’t fulfill his or her duties to the best of their ability can have a draining effect on the rest of the board. The fallout from that can be anything from poor decision making to the failure of the organization or anything in between.
Prevention is the best cure for not having to deal with the awkwardness and discomfort of having to counsel a poorly performing board director or making the choice not to re-nominate one. Board director recruitment and board succession planning are processes that are designed to ensure that nominating committees are carefully vetting director candidates and doing their best to select the most appropriate ones. The other piece of the puzzle is to ensure that all newly appointed board directors get the proper orientation and training. The goal is for them to be certain of their duties and expectations.
Boards that fail to have the proper policies and procedures in place for appointing and preparing new directors for their duties can cause greater problems and a greater sense of discomfort for their boards. Existing boards have a responsibility to conduct due diligence in selecting and training their peers.
Depending on the issue at hand, it may make sense for the board chair to have a meeting with the underperforming board director and come up with a plan to help him or her succeed. That decision may rest on how much longer the board director has left on their term. If it’s toward the end of the term, the board may choose to ride things out and then decide not to re-nominate the director in question. If it’s early in the board director’s term, the board president will need to address the situation as early as possible.
Among the other possibilities that the board chair will need to assess is whether the appointment was not a good fit from the beginning. If this is the case, the board president should have a conversation with the director about whether they should resign or whether to ask for a resignation.
If the choice is not to re-nominate a board director for not meeting their duties and responsibilities, the board chair should be expected to explain why. Under any circumstances, it takes courage and sensitivity to broach such a tender subject.
Tackling Problems Before They Begin
Boards that are in the position of having nonperforming or poorly performing directors need to be honest with themselves about why they missed the signals that led to a poor fit. Board management software is the modern governance solution to prevent problems with directors who are unprepared to fulfill their duties. Technology is the key to effective board self-assessment, recruitment and succession planning.
Boards are remiss if they fail to ensure that they have clearly documented job descriptions and expectations for their roles in place. Boards should also have a prepared document in which board directors can sign an agreement that states that they agree to abide by their fiduciary duties.
Beyond the agreement, new board directors should have the benefit of proper training, which typically begins with a comprehensive board orientation. After that, many boards set up board development plans and some of them assign a mentor to new directors. These processes should reduce the chances that the board president will have to deal with poor performance later on. However, nothing is carved in stone, so it’s a good idea for boards to have a policy for how to deal with poorly performing board directors if the situation should occur.
Addressing the Problem of Poor Performance
The issue of how to address lackluster board director performance rests with the board chair. It’s best to confront the situation head-on and in person. It should be a frank conversation about the issue at hand and how it has a ripple effect on the rest of the board and, more importantly, on the organization.
The conversation should begin with asking if there have been any changes or recent developments in the director’s personal or professional life that may be contributing to the problem. The director may have an injury or illness or be dealing with a close family member who does. Find out whether there has been a job change or other major life event that has been a distraction from board duties.
In the best of cases, an underperforming director may just need a friendly reminder about what they signed up for, along with some monitoring and follow-up. If that doesn’t seem sufficient, some retraining, mentoring or a development plan may be in order.
Boards should try to consider that poor performance is a subjective thing and the director may have a completely different perspective on the matter. The board chair should be an active listener and give the director time to process everything. They should try to explore the issue as fully as possible and come to an agreeable, reasonable solution. They should focus on the organization’s needs, rather than the person’s needs. Finally, they should have a discussion about how they can best meet the organization’s vision and mission.
In the event the board director and the board president aren’t on the same page, the board president should be prepared to give specific examples of how the director isn’t fulfilling their duties. For example, their agreement states that they must attend 90% of board meetings and they have only attended 60%. Annual board self-assessments or peer assessments can help to give concrete information about board director performance without making a board director feel like they are being unjustly targeted.
Under less-than-ideal circumstances, the board president may need to make the difficult choice to ask the board director to resign.
Diligent Corporation designed a digital Assessment tool that will help boards discover their strengths and weaknesses, which gives them an opportunity to address issues at the earliest possible opportunity. In addition, the Nom Gov tool is an excellent tool to help boards attract the most qualified board directors to set up the most ideal board composition.
Board director performance can be a touchy subject, but when the right groundwork has been laid, it doesn’t have to be. Board management software by Diligent Corporation streamlines board processes, making boards more productive and efficient.