The African Bush Elephant is so a huge animal with an average weight of over five tons. You are finished if it tramples on you. It creates fear even for the lion, the king of the jungle.
In this article, an elephant is being used as a metaphor to represent big issues in the boardroom that board members do not want to talk about. They do not want to talk about them because of the fear of possible negative consequences.
The issues if not talked about and resolved may affect the effectiveness of the board and the performance and sustainability of an organization.
A question to ask you, are there big elephants in your board room? Are there red flags that may indicate the existence of these issues?
The following red flags may indicate the existence of big problems in the boardroom;
Powerful chief executive
There are sometimes domineering chief executive officers (CEOs) who tend to have more power than the board. The board members are silent and cannot challenge the powers of the CEO for fear of negative consequences. They can be victimized by the CEO.
These CEOs are normally appointed or supported by what I may call powerful people from above. The powerful people from above could be the majority shareholders, the group board in the case of subsidiaries, and the government in the case of parastatals.
In some situations, the board is only informed of the appointment of the new CEO and the board does not have any power to vary anything.
In these organizations, the board in practice reports to the CEO instead of the CEO reporting to the board. The powerful CEO may misuse the resources at his or her disposal for selfish motives.
The power CEO may also be a risk to the organization because he or she can override the controls. The board members may not bring up the issue of misuse of power by the CEO for fear of being victimized.
Therefore, a powerful CEO may result in a big elephant in the boardroom if no bold corrective action is taken by the board.
Powerful board members
There could also exist power board members that tend to usurp the powers of the chief executive officer. The powerful board members could be as a result of being the most senior and experienced board members.
The powerful board member could also be a result of being appointed or supported by powerful people from above. If these members are not controlled, they may misuse the resources of the organization through overriding controls.
Highly over-sensitive people in the boardroom
There could be highly over-sensitive people in the boardroom. They could be either board members or members of the management team.
These people easily feel threatened if questions or comments are raised in connection with their written or verbal submissions. They tend to feel that the board or their colleagues do not trust them.
Board members may avoid asking questions or commenting on the submissions for fear of offending them.
It is important to be careful about highly over-sensitive people as they could easily cover their omissions or wrongdoing.
Not living the core values
Core values are rooted principles that serve as cornerstones to guide the actions of an organization. Everyone in the organization is expected to live the core values.
It could indicate a big problem if some people either on the board or part of management are not living the values and the board members are silent about it. Why are they silent?
This may indicate the existence of powerful individuals in the organization who no one wants to talk about because of the fear of being victimized.
The core values should be lived by everybody in the organization including shareholders, directors, management, and staff.
Rubber-stamp board
A board may be called upon to approve management proposals or reports for which board members have not had adequate time to read and appreciate. Some of the proposals are sometimes verbally explained with minimal written support.
It is a rubber-stamp board if it approves proposals or reports put before it without serious deliberations. The meetings tend to be too brief.
This may indicate a serious problem if board members are silent about their actions of approving board papers without thorough discussions.
Unresolved conflicts
There are sometimes long outstanding conflicts between individuals on the board and the management team with no serious attempts being made to resolve them.
You have to ask yourself why are the conflicts not being resolved.
Is there anyone benefiting from the situation? What is the root cause of the conflicts?
If the conflict is caused by unclear definitions of the roles and responsibilities of both the board and management or poor communication channels among others.
Are the conflicts caused by the unethical practices taking place that are sponsored by powerful individuals in the board or management team?
Open discussions not promoted
If the chairperson is not strong and experienced enough to keep the board united and focused on the agenda, the board can easily divide itself into small groups of members with like minds.
In the divided board, the board papers are first discussed within each small group to agree on a position that the group will pursue during the full board meeting.
The small board groups can easily be manipulated by the powerful members of the board and management.
In addition, some members may not be direct in their contribution as they tend to speak in parables.
The divided board may indicate the existence of serious issues on the board as suboptimal board decisions tend to be arrived at.
Conclusion
The root cause of the above red flags needs to be investigated as they may indicate the existence of serious issues within the board room. Problems once identified must be confronted and addressed to create an environment that allows the board to remain united and focused on the agenda.