Key Strategic Tips to Resolve Director or Board Level Disputes
The Chairman of a board of 20 directors was supporting the Chief Executive to put together a digital strategy which was going to change the face of the company. His view was that if the organisation did not fundamentally change strategy, the organisation would necessarily fold.
The directors represented a number of opposing key shareholder views and this was compounded by the fact that the shareholders had lost confidence in certain aspects of the organisation. Equally, the executives within the organisation had lost confidence in the decision making abilities of the board and were creating obstacles to getting the job done. This was compounded by the fact that the conflict between the factions had been peppered with individual fall outs that were affecting the day-to-day workings of the organisation.
When faced with a board level dispute ranging from issues of strategic direction, downsizing to shareholding and value, you are generally dealing with high-stakes issues that could potentially make or break the organisation as was the case in this example, and the careers of those involved.
For the organisation, the bottom line is that a wrong decision could affect profitability, cash flow and reputation. For the directors involved, it has the potential to be destructive for key working relationships, undermining and carries the dangers of scapegoating and lack of trust, which again affects performance and the bottom-line.
The following key points are a start to address these issues and put principles, performance and profit before personalities:
Itemise and clarify what all the parties want: When stakes are high it is easy to concentrate on the issues and what happened. Starting with what everyone wants creates a focus on the future and the finish line. In this example, following a period of consultation and reflection each faction was tasked with identifying future focussed wants and needs.
Don’t underestimate the subtext: We generally deal with headline issues but not the subtext (“I don’t trust your opinion”). Whether we voice it or not the subtext is “in the room” so the individual involved needs to be conscious of it in order to decide how they are going to address it. This does not mean that we all need to tell each other how we feel about each other but our own awareness can inform our decisions. In many disputes I mediate or facilitate it is the subtext that turns the issue around. In this case, one of the directors in particular had wanted to get the CEO job. It was important to go through the conversation with him in which he was able to decide whether he wanted to buy in to the future of the organisation or not. Although he was disappointed that he had not got the job, the fact that he could voice it in a safe environment helped him move on to the decision to back the CEO and let go of old resentments.
Create the parameters for a good negotiation: Whether the issues are personal or not they will always need to be negotiated so each individual needs to work out their best and worst case scenario for all the issues. In particular, we identified what would happen if they made steps towards agreement and what would happen if they didn’t.
Set clear ground rules: Establishing basics during the course of the negotiations such as how long they will last, topics for discussion, how individuals speak to each other (e.g. don’t talk over each other) can positively affect the flow of the conversation and the efficiency with which matters are dealt with.
Follow up with SMART agreements: The end of any negotiation needs an agreement which is Specific, Measurable, Achievable, Realistic and Time bound.
Seek expert advice: Training and developing my practice as a mediator has enabled me to carry out successful mediations and facilitations of this nature without the collateral damage, which can be the consequence of many a well-meaning intervention. I use key mediation and conflict resolution skills to do this, which ensure:-
- a safe environment
- engagement and
- individual responsibility of the parties.
I also train these skills on our popular courses which you can book today with a Sacked in the City discount of 15% when you type in the discount code “fifteen”.
Louisa Weinstein is the Managing Director of the Conflict Resolution Centre.
If you would like to know more about Louisa click here.