Companies & Industries

Directors Who Don't Deliver


These five types of dysfunctional board members "serve" at many companies

I sit on a board with two members who, for the past year, have said and done little. Both were just reelected unanimously with the support of the nominating committee. What's your take?

— Anonymous, New York

So, two seat-warmers on your board were just reelected unanimously, you say? Doesn't that mean you voted for them too? If so, don't worry. You're not the only director in history to endure an ineffective or otherwise dysfunctional peer. Not to slam boards; on the whole, they add real value. But boards frequently tolerate troublesome performance from one or two of their own. It's simply too time-consuming or impolitic to eradicate. And that is why too many boards, in both the public and private sectors, don't make the contribution they should.

To be clear, we're not talking about board behavior that is criminal. With a few famous exceptions, boards will remove anyone who breaks the law. No, we're referring to boardroom behaviors that are perfectly legal but perfectly destructive as well. There are at least five by our count:

THE DO-NOTHING.

Let's start with the type of bad board member you describe. Some of these individuals are too busy with their own companies, other directorships, or their personal lives to care about your board. Some don't have enough skin in the game to work up a real interest. Others lie low for job security. At $25,000 to $100,000 a pop, corporate directors get paid good money. In the private sector, prestige is often the reward. So Do-Nothings rarely challenge or probe. Nor do they venture into the field to make sure what they hear in the boardroom about values and strategy matches what employees feel.

THE WHITE FLAG.

Do-Nothings are awful but not nearly as dangerous as type two in our taxonomy. These individuals live in fear of being personally tainted by any kind of controversy, such as a class action or activist protest. They lack a key characteristic of any good board member—courage. With every public or private challenge, they pollute the boardroom by hyperventilating for a settlement, even if it means selling out on principle just to get out of the crosshairs. Sure, a board must settle on occasion, but never before seeing the organization through a discovery of the facts. Such a process creates a culture of trust between management and the board, and it is only in such an environment that risks can and will be taken.

THE CABALIST.

The third type of bad board member is the director who sits quietly in meetings, often going along with the prevailing side, before taking up his cause behind the scenes and building constituencies to achieve another agenda, his own. In many cases, good board members shut down such practitioners of palace intrigue. But sometimes a board's cabal is its own executive committee, and the result is a controlling, secretive board-within-a-board that turns other directors into second-class citizens. Such a dynamic decommissions the majority of the board's brains—and what a waste that is—but it also undermines the board's relationship with management. Executives can't tell if a director is speaking for himself, the board, or the cabal.

THE MEDDLER.

Good directors focus on big-picture issues such as succession and strategy. By contrast, our fourth "offender" likes to butt into management. Instead of meeting with high-potential talent and discussing industry dynamics, meddlers get all mucked up in operational details. They seem oblivious to the fact that board members are there for their wisdom, sound counsel, and judgment, not the day-to-day running of the business.

THE PONTIFICATOR.

And finally, there is the self-important bloviator who cannot get enough of his own voice, especially when it is opining on "matters of state," such as world events, social trends, the company's history, or his own area of expertise. Like Meddlers, Pontificators distract boards from the business before them and enervate their colleagues in the process.

As a board member, it is easier to let a couple of Do-Nothings hang on till retirement or tolerate a few cowering White Flags as other directors handle each crisis. Or to try to isolate or work around Cabalists and ignore Meddlers and Pontificators. But imagine how much better it would be if nominating committees, usually just focused on vetting potential members, dealt with the hard cases right in front of them. After all, nothing can keep a board on its best behavior but itself.

Jack and Suzy Welch look forward to your questions. You can e-mail them and view their new website at www.welchway.com For their podcast, go to www.businessweek.com/search/podcasting.htm.

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