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Reflection – Usha Jose

by on November 6, 2007

Dysfunctional Board members

Last week in class, Jules case study launched a very lively discussion about dealing with C.E.O.s who are not willing to embrace uncertainties. Though the case study was projected to illustrate the need for flexibility in management in order to adapt to changing organizational environments, it also gave us some glimpses of the not-so- perfect world at and above ‘C’ level. One question that many of us raised was – as long as the company was profitable, why did the board members disapprove of Jules? Wasn’t he doing his job adequately?

Jules was disliked by the board members for being a strong believer and practitioner of self organization. The board members felt powerless and voiceless in the well planned and agenda based meetings conducted by Jules. Jules did not allow uncertainties in his meetings. He personally met board members beforehand to ensure that proposals were acceptable and votes were unanimous at meetings. He did not want his meetings to be placeholders for uncertainties and discussions yielding no conclusion. Jules did his homework to such an extent that the board members felt manipulated. The board’s growing dissatisfaction with Jules’ pre-planned meetings resulted in his replacement. The question is, can be he blamed for running an orderly ship? Was that a good reason to fire a C.E.O who brought profits to the company? At least he was not like the recently ousted Merrill Lynch C.E.O who made merger approaches to Wachovia without even notifying any of his board of directors. (The losses he brought on the company is quite another issue.)

After this discussion in class it was interesting to read Jack and Suzie Welch’s article “Directors Who Don’t Deliver” in Business Week. The writers point out five different types of dysfunctional board members.

1. The Do Nothing – These are board members who are either too involved with their ‘other jobs’, and do not have the interest or knowledge to actively participate in board meetings. Their main motive for serving the board is money or prestige associated with the job. They are seldom motivated to challenge or to probe what they hear in boardroom meetings.

2. The White Flag- As the name suggests these are board members who lack courage and are constantly worried about being tainted by controversy. In this fear, they often press on for settlements and try to get out of the muddle as soon as possible without rethinking options or facts. Their interests often do not match those of the organization and their decisions in favor of settlements do not favor the welfare of the company.

3. The Cabalist – This type of bad board members sit quietly in meetings often riding the then high tide, but nourish hidden agendas for which they work relentlessly behind the screens. Their work can often lead to groups within the board.

4. The Meddler – These are members who dig up into management issues rather than focusing on the big picture. They get involved in operational details forgetting that their job is to provide insights about the strategies rather than the operations of the company.

5. The Pontificator – This is the self important person who likes to talk, often about himself. The pontificators along with the meddlers distract the board from focusing on important things.

I think that the dissatisfied board members in Jules case belong to the meddler category. Although a broader approach is essential for the organization to grow in challenging situations, some times pre- planned meetings can help in curbing dysfunctional board behavior.

Reference
Directors Who Don’t Deliver: Jack & Suzy Welch, Business Week, Oct 29,2007

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One Comment
  1. It is a great summary. I think the reason we call it “Dysfunctional” is because board members did not get a clear view that what they should advise CEO to do. But I would like to question why board members have to think about the solutions. Although board members feel dissatisfied first, it is not necessary and unfair for them to figure out what to do. If the customer complained to you about your companies’ product, would you think it is customers’ responsibility to figure out how to solve is problem? Certainly not, you should hear their voices first and then try to give them a solution as soon as possible. Same situation comes here. Board members spent money to hire a CEO. So if they are dissatisfied with CEO, CEO should listen to the voices from board members and find out a solution by himself. There is no way to ask consumers to give a proposal to the company.

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