Coaching in the Board Room |

We are developing our own company, KAPU-CARE GmbH, and coaching executives is one key element of our value proposition. However, as I analyzed and diagnosed my addressable market, I started reflecting on the combination of coaching towards one of my other focus areas: non-executive board directors. This area needs to be known to me and one where I want to educate myself more to assess current and future potential.

There are many dimensions to impactful coaching in the Board room. It could already start as career coaching executives before considering and taking on a non-executive director (NED) role. Coaching could be needed when starting as an NED to allow faster and more successful onboarding. Later, coaching may be needed to address a specific challenge in the role of a NED, and finally, coaching may be needed for the Chairperson her-/himself since this role is very specific in the board room. These examples are focused on individual coaching; however, coaching may also be needed for the entire board as a group/team to address specific needs and/or to make the board more effective.

My research will focus primarily on secondary sources; however, I will also reality-check my hypotheses and conclusions within my professional network. I am convinced that introducing professional coaching into the boardroom brings many benefits, and this area of coaching is relevant to my coaching niche and practice. At the same time, there is a good synergy between my Power Tool (selflessness vs self-centeredness) and my LIVE Executive Coaching Model.

My hypotheses are:

1. Boards are changing in their role and the value they bring to stakeholders of the organizations they lead, from less governance to more strategic focus. As the internal/external environments are increasingly more volatile and impact business performance and strategic plans, board members are also added/exchanged to ensure the right competencies to meet these changes (active board). More subject-matter experts are brought into boards, e.g., digitalization, sustainability, ESG, etc., and they will still tend to be in an active corporate career, be younger, and be more specialists and less generalists.
2. Individual and team coaching (and mentoring) are needed to achieve a high-performing board. Individual coaching to allow for faster onboarding and to address individual restrictors in optimally contributing to the discussions and decision-making in the board and/or to address issues concerning the Chairperson. Individual coaching of the Chairperson, who carries the overall responsibility for the board and towards keyboard stakeholders, incl. the CEO and executive management team. Team coaching to optimize the performance and effectiveness of the system, which the board can be defined as.

Coaching in the Board Room: Literature Review

My literature review has focused on the following combinations of keywords: board of directors, non-executive directors, Chairperson, and (non)-executive coaching. My searches for secondary sources initially started on the internet. They primarily focused on books, articles in the Harvard Business Review, McKinsey.com, and INSEAD.edu, and websites of other executive coaches. I searched for peer research papers on my subject but found none on Coach Campus. Primary sources included participation in a St. Gallen University Board Conference (October 2023) as well as an interview of Ms. Simone Stebler, Partner at Egon Zehnder International, Zürich, and responsible for searching candidates for Chairperson and non-executive director positions in national/international companies.

The searches for existing information on coaching in the board room did not uncover much specific literature, especially not regarding the individual NED or Chairperson role. Some information exists on introducing team coaching to the entire board of directors. I do believe that my research will be novel in some areas. The roles of the board and board members are changing quickly due to changes in the environment and stakeholder interests driven by an increasingly more volatile, uncertain, complex, and ambiguous context. New research on improving the effectiveness of boards and board members will make a positive contribution simply because of the time it is conducted.

As a result of the above lack of much literature on coaching in the board room, the approach of this research paper will be one where I will draw the link between existing information and knowledge of what makes a board and board members effective, dynamic, and/or active and how coaches can then be neutral facilitators for establishing well-functioning boards and board members. In some cases, key observations will be stated as hypotheses for further research, verification, and validation.

Findings and Their Application

The Role and Responsibility of a Board, Chairperson, and Non-executive Director

The roles, responsibilities, and accountabilities of the board of directors, the individual board members, and the Chairperson have been evolving fast in recent years. The literature outlines the impacts that a volatile, uncertain, complex, and ambiguous (VUCA) environment has on the board, addressed explicitly in the book by Lars Bo Hansen and Steen Ernland on Active Boards (2021). They refer to the following external macro-trends impacting boards: 1. Globalization. 2. Volatility. 3. Technology. 4. Regulations. 5. Sustainability. I will not go into the various sub-parts of each of the 5 macro-trends and instead rely on the reader’s perception of the impacts. Attending the annual St. Gallen University Board Conference in October 2023, provided additional insights into the rise of expectations towards boards, with a specific focus on the following: 1. boards are getting larger and more diverse, 2. investors, proxies, regulators, and NGOs are more focused on compliance, 3. more topics on the board agenda (ESG, geopolitics, cybersecurity, digital, supply chains, etc.), and 4. frequency and scope of crises that require immediate board attention is increasing.

As these impacts drive changes to boards and board members, I hypothesize that coaches must support the transformation and actively work with individual board members and the entire board.

A board is held accountable to two main areas of responsibility: 1. Governance and 2. Development (strategy). Governance topics generally cover the following: 1. historical performance evaluation and (financial) results, 2. definition of company policies, 3. defining and managing risks, and 4. board rules, procedures, and guidelines. Strategy topics generally cover the following:1. strategy plan to ensure short- and longer-term competitiveness, 2. future development of the company, 3. proactive work on board composition and cooperation, 4. proactive work on executive composition, development, and succession, and 5. effective cooperation with company owners (and other stakeholders). The allocation of board time and focus is changing from previously 80% governance and 20% strategy to 20% governance and 80% strategy, transforming the board’s work and priority-setting. (Lars Bo Hansen and Steen Ernland, Den Aktive Bestyrelse, p. 32, 2021).

I hypothesize that the shift towards strategic topics, incl. people decisions, changes the background, experience, subject-matter expertise, and career status of board members. Coaches will increasingly be brought in to facilitate the onboarding and development of a new ‘breed’ of board members to respond to the above shifts.

The role of the Chairperson has always been very important. It can be described as: 1. leading the board, 2. having the necessary competencies [incl. working well with the CEO/executive team], and 3. handling the company’s ownership. This role is gaining importance as complexity and uncertainty increase, risks are more severe and with higher probabilities, and focus is more external to the company, while at the same time, there is higher demand for being closer to the CEO/executive team. (Lars Bo Hansen and Steen Ernland, Den Aktive Bestyrelse, p. 47-48, 2021). Good Chairpersons create good boards. The Chairperson establishes the right conditions for overall board and individual director effectiveness (Group dynamics and enhancing board effectiveness, Ashley Harshak, Dynamics at Boardroom Level, p. 20). Helen Wiseman, INSEAD Directors Network Board Member, states that given the high degree of external scrutiny and complex dynamics in place, she highly recommends coaching, particularly for new Chairpersons. (INSEAD.edu, Karen Loon, 2021).

I hypothesize that external and internal environmental changes impacting the role of the Chairperson will lead to changes in the personality and skill profiles of Chairpersons and that coaches will increasingly be brought in to support this role.

Joe Binnon captures the dimensions of technical versus interpersonal elements in the board as a group/team and towards individual board members and how they need to be acknowledged and supported to achieve a balanced framework for the board.

(Improving board dynamics, Table 2.1, Joe Binnon, Dynamics at Boardroom Level, p. 28)

Mannie Sher and Leslie Bisset state that “boundaries, both inner and outer, while permeable and separate, are often breached because of unconscious forces acting on and within boards and the organizations they lead. It is the business of consultants, coaches, and evaluators when working with boards to name these unconscious forces and facilitate discussion of them in open and frank ways” (Introduction to Dynamics@Board Level, Mannie Sher and Leslie Bisset, Dynamics at Boardroom Level, p. 9).

Directors working on a board strive to protect and advance company interests. However, they also have their own emotional lives with needs and interests that must be met and protected (Mastering board dynamics, Vincent H. Dominé, Dynamics at the Boardroom Level, p. 31). This adds to the many layers that are present in the boardroom: group/team dynamics as a system, the interpersonal elements between board members, and the personal and emotional level of each individual board member. Attempts to coach only at the individual developmental level [or at the interpersonal level] may get stuck, or the solutions and new behaviors not endure, if the wider system view is not included. (Systemic Coaching and Constellations, John Whittington, 3^rd edition (2020), p. 311).

I hypothesize that coaches will increasingly facilitate embracing the impacts and supporting the awareness of personal and interpersonal elements and unconscious forces, working with the board as a group/team (incl. taking a system view) and with individual board members.

The roles and responsibilities of the board, the Chairperson, and individual non-executive board directors are changing fast, and this will impact who will be joining boards, the skills and experiences needed, and the personality traits required for an active board to respond effectively. I expect that coaches will be increasingly needed to support and facilitate the development of the board as a group/team and individual board members (incl. the Chairperson).

Board Dynamics vs. Board Performance/Effectiveness

My perspective will now move from the various players to the dynamics in the board room and how they drive the performance and effectiveness of the board and individual members. As this perspective becomes clear, the impact of coaching will be highlighted as a catalyst to facilitate and improve the dynamics and effectiveness of the board.

Much practical board guidance and board member training is biased towards statutory responsibility, board processes, structure, role definition, evaluation, and succession. Limited practical guidance and training are provided in the working dynamics of boards. People are left to fend for themselves to understand the dynamics, often misinterpreted as politics. (Improving board dynamics, Joe Binnon, Dynamics at Boardroom Level, p. 23). A board is a social system comprised of individuals, and each individual’s unique identity and ways of operating contribute to the overall group dynamics (Mastering board dynamics, Vincent H. Dominé, Dynamics at Boardroom Level, p. 30).

An effective board develops and promotes its collective vision of the company’s purpose, its culture, its values, and the behaviors it wishes to promote in conducting business (Group dynamics and enhancing board effectiveness, Ashley Harshak, Dynamics at Boardroom Level, p. 15). This definition is expanded upon by The Australian Institute of Company Directors, which advocates seven key performance indicators they believe are critical for board effectiveness and where board coaching can enhance collective performance: 1. committed directors leading with a common purpose who can harness collective skills, 2. respectful relationships and behaviors among directors and with key stakeholders, 3. awareness of individual impact in a decision-making group, 4. collective understanding and decision-making which is more than the sum of individual knowledge, 5. ability to perceive and work with difference and bias, 6. open to feedback and evaluation of board processes, and 7. clarity of role – director as distinct from an executive. (iecl.com)

Board members have a limited drive to overcome the challenges of working in groups for several reasons, including their level of seniority, diverse leadership styles, incompatible interests, and time constraints. Arrogance (I know), insecurity (I should know), narcissism (I need to run the show), and fear of leaving their comfort zone (why should I take risks?) are some of the thoughts and feelings impairing their ability to work effectively as a group (Board effectiveness, Toya Lorch, Dynamics at Boardroom Level, p. 132). Introducing board coaches having this knowledge can work as a mitigation step towards these challenges, and allow for improving the dynamics and effectiveness of the group/team and individual board members. A board is a system that requires coaches with experience and skills unique to such a group/team and individuals.

Decision-making in the board room is impacted by an anxiety that exists beneath the surface in many ways and continually impacts behavior. Two deep-rooted fears in Richard Barrett’s model ‘The Seven Levels of Consciousness’ (Barrett, 1998) are: Firstly, the fear that ‘I am not loved enough’ and secondly, the fear that ‘I am not worthy enough’. And with these underpinning deep-rooted fears, the following show up: 1. fear of looking silly, 2. fear of offending others, 3. fear of not being accepted [stay safe], 4. fear of being alone in my opinion, 5. fear of not being liked or respected or feeling part of the group, and 6. fear of conflict. (Decision-making – the no. 1 dysfunction impacting the effectiveness of boards, Martin Palethorpe, Dynamics at Boardroom Level, p. 77-78). A board coach can support individual board members in being aware of such fears and help reframe them for the benefit of themselves and the board as a group/team.   

Why Does Improving Dynamics and Effectiveness in the Board Room Matter?

It is the board’s role to ensure that needed policies and guidelines are put in place and that they are practiced in the organization and by and towards all stakeholders. An active board must act before many adverse events occur and not after the fact. One small mistake can be enough for negative stories to spread on the internet and social media and eventually develop into a negative backlash from customers, employees, and other stakeholders.

Given that the impact of the board’s functioning as a team is a more significant predictor of company performance than individual directors’ backgrounds, skills, and experience, it is time for boards to spend more time focusing on their group dynamics and for boards and directors to dedicate time for coaching (and mentoring). (INSEAD.edu, Karen Loon, 2021).

Solange Charas (2014) refers to his research that provides strong evidence supporting three findings: 1. “cultural intelligence” of individual directors, or their predisposition to working well in teams, is critical in generating high-quality team dynamics, 2. the quality of board-level team dynamics is highly correlated with firm profitability, and 3. boards that can function effectively as a team have an 800% greater impact on firm profitability than any one well-qualified board director – in other words….the whole is greater than the sum of its parts. He states that boards can improve their performance by focusing on team dynamics. The key steps are 1. determine your board’s dynamic, 2. rethink your recruiting criteria, and 3. get team coaching. (Harvard Business Review, Solange Charas, 2014). 

Indeed, the results suggest that boards with better dynamics and processes, as well as those that execute core activities more effectively, report stronger financial performance at the companies they serve (McKinsey.com, 2018).

I hypothesize that group/team and individual coaching can significantly impact board dynamics and effectiveness and, consequently, financial performance. Financial performance is not the only measure of success; however, as illustrated previously, an effective board also drives the purpose, values, and behaviors of a company, which can all positively impact stakeholder satisfaction.

Coaching in the Board Room

Good coaches are trusted partners who bring a high-level perspective on directors’ situations and have the know-how and experience to guide their professional journey. Board coaches are familiar with the context of board work and have the necessary credibility to accompany board members (incl. the Chairperson) individually and collectively. Board coaches can work with individual directors to support them, identify their development goals, and enhance their participation on the board. Board coaches can also work with the board as a whole. In addition to conducting the confidential board assessment interviews, coaches can: 1. observe board meetings to assess board dynamics, 2. work with boards at meetings to establish practices that can enhance group dynamics, and 3. facilitate discussions with boards that allow directors to share perspectives, surface hidden issues, and have courageous conversations (Mastering board dynamics, Vincent H. Dominé, Dynamics at Boardroom Level, p. 38).

Those involved in organizational development or (non-)executive coaching can play a significant role in helping boards to be effective. They can: 1. help board members understand that in healthy systems, the past must be acknowledged to make sense of the present [also highlighted in Systemic Coaching & Constellations, John Whittington, 3^rd edition (2020), p. 55]. By acknowledging the past but working with the present, coaches can help to free board members from their stories, 2. counsel founders and newer executives [and directors] to ‘take back their projections’ and to work as a team with the present; as a team it is easier to process complexity and see the space more clearly, 3. help the board to identify the dynamics that are causing unhelpful patterns in their functioning. Those patterns will continue to exist unless the underlying dynamics are addressed, 4. Support leaders in accepting that it is OK not to know – and instead create a safe space for dialogue. Working with not knowing may actually help keep the board in touch with what it is supposed to be doing – its primary task – but they can only do that with each other, 5. encourage new members of boards to acknowledge what has come before them so that their colleagues have confidence that they will be able to connect their contributions with the organization’s past, and 6. discourage new members of the board from seeing themselves as separate from the dynamics of the board – however, dysfunctional these may appear when they arrive. (Caught between vision and memory – the impact of high growth on board dynamics, Wayne Mullen, Dynamics at Boardroom Level, p. 56-57).

Board work involves a complex interplay of relationships – that is the wellspring of board dynamics. So, we need to make board dynamics conscious and conscious about the role that coaching as a process can play in managing them healthily (Helen Wiseman, INSEAD Directors Network Board Member, 2021). Ultimately the role of the team coach is to help the collective, “become a self-sustaining learning team that will continue to learn and develop from its own rich experience well after the external team coach has finished working with them” (Hawkins, 2017).

One last perspective comes down to the context of a board and its members. A board is most often comprised of professional and experienced individuals and as coaching in the board room matures and becomes increasingly more accepted, it will be important to offer a clear methodology for how to best measure impact and direct results from coaching.

Conclusion

My research focused on two main hypotheses:

First, I focused on the various roles and responsibilities on the board and how the VUCA world impacts each role and the entire board. I developed four hypotheses that each highlight the importance and positive impact that coaching will have on the needed transformation of individual board members and the entire board, the change of board composition and coaching to support the onboarding of new members, the change in the role of Chairperson and supporting this role with coaching and finally, the importance of recognizing how personal and interpersonal elements, as well as unconscious forces, will impact the board. Stating these hypotheses means that further primary research is needed to prove the positive impacts that coaching may have on each of the perspectives of the individual roles and the entire board.

Secondly, I focused on board dynamics and effectiveness and how coaching can act as a catalyst to drive and improve each element. Various perspectives on board dynamics and effectiveness were highlighted and linked to individual board member roles and the board as a team and system. This, in turn, requires coaches with experiences and skills tailored to coaching in the board room. When effective, evidence exists that not only financial but also additional measures of success will outperform boards with no focus on leveraging coaching to improve board dynamics and effectiveness.

My research paper highlighted the importance of developing a clear methodology to measure best (i.e., prove) the impact on results from coaching in the board room. This should lead to further empirical research, which, when done and proven, can speed up the introduction and acceptance of coaching in the boardroom.

Reference

1. Simone Stebler; Partner at Egon Zehnder International (EZI), Zürich. Responsible for searching for Chairpersons and non-executive directors for clients of EZI (February 2024)
2. St. Gallen University Board Conference (October 2023)
3. Den aktive bestyrelse, Lars Bo Hansen & Steen Ernland, 2nd edition (2021)
4. Dynamics at Boardroom Level, edited by Leslie Brissett, Mannie Sher, and TAZI Lorraine Smith (2021)
5. Systemic Coaching & Constellations, John Whittington, 3rd edition (2020)
6. https://blogs.insead.edu/idpn-globalclub/positive-board-dynamics-and-coaching-key-to-superior-performance/, Karen Loon (2021)
7. https://www.iecl.com/article/how-do-boards-support-themselves-to-perform-in-a-constantly-shifting-landscape
8. https://hbr.org/2009/01/what-can-coaches-do-for-you, (2009)
9. https://www.mckinsey.com/capabilities/strategy-and-corporate-finance/our-insights/a-time-for-boards-to-act, (2018)
10. https://hbr.org/2014/01/the-key-to-a-better-board-team-dynamics, Solange Charas (2014)