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Can you have too much board and management collaboration?

More collaboration between the board and management is not always a good thing - some guidelines for when you might have overstepped the mark

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Most organisations view collaboration between the board and management as a positive thing, but there are circumstances where collaboration between the board and executive can be problematic.

Healthy board collaboration gives the executive strategic guidance, sets clear expectations and shares the benefit of the board members’ experience. But too much collaboration can affect the balance of the board and impact their ability to make impartial decisions.

As Diane Smith-Gander says, “boards need long noses and short fingers”. They need to be able to examine things thoroughly, sniff out what’s important about a proposal and understand the important details, but that’s where the involvement should end.

The chairman can never lose their objectivity

Recently I was talking to a chairman who was clearly actively involved in the day-to-day running of a company. While it’s great that he’s energetic and excited about the company, it became apparent that he was copied in on every single important email and was attending operational meetings most days of the week. That's beyond the role of a non-executive chairman.

All companies want their chair and CEO to have a great relationship, but we've got to remember that they’re not the chairman of the company, they're actually the chairman of the board.

The chairman's job is to manage the board's scrutiny and oversight of the chief executive. If there's too much collaboration the chair can lose the ability to provide oversight or have objectivity because they’re emotionally committed to the CEO, the executive team, and the proposals they’re putting forward.

The chairman, or any other board member, should never own a proposal that comes to the board. It must be the executive team’s proposal. If a board member spends too much time in the detail of a proposal they may actually become part of its development. It can then be difficult for them to detach or give the proposal real oversight when it comes before the board.

A board needs to question what management is putting before them - they need to go deeper and broader and be dispassionate about the issue. Too much collaboration can put that in jeopardy.

It’s a problem when board meetings look like executive meetings

While boards want to make the best decisions and achieve the best outcomes, there’s a fine line between acting in the best interests of the company and second-guessing management. Fundamentally, if the board is just holding another executive meeting then they aren’t adding value.

Boards need to ask questions that the executive haven’t. They need to check the quality of an initiative and ensure it’s within the risk appetite that they have set. They also need to ensure that the initiative is actually executed in the the manner approved - without doing any of the groundwork or execution.

So if the chairman is presenting a proposal to other board members that's a bad sign. The executive team must present proposals to the full board, including the chairman. If there’s no new information in the board papers or the chairman is across the fine details of a proposal then that’s also a bad sign that collaboration may have been too close.

You also know that a board has overstepped the mark when they are essentially rewriting a proposal that’s come before them. If they start looking at new evidence that the executive team has not really considered, they should stop and refer it back to the executive. They can, of course, suggest that they take a second look and change parameters, revise risk appetite or set new boundaries for the proposal. The executive should then have the opportunity to review their proposal within those new parameters.

If the board starts to actually put a proposal together themselves then the executive team loses ownership over the initiative and that’s a big problem.

Ultimately, the chairman and the board are a governance system. They need to have distance so that they can maintain objectivity over the CEO and the executive team. While collaboration between the board and the executive is to be encouraged, you can have too much of a good thing. The board needs to ensure that they maintain a respectable distance so they can remain dispassionate when considering issues that go to the long-term survival and success of the company.