Boards today often strive to make decisions by consensus, which is both healthy and sustainable compared to forced votes. More than one corporate governance course has been offered on how Boards deal with dissent - a significant shift in boardroom governance over the past generation. But, are they hitting the right notes?
Let’s explore the typical roots of dissent as a tool to help Chairs and Board members to understand, identify and so address dissent more effectively:
- Information gap
- Knowledge gap
- Direction gap
- Strategy gap
- Political gap
- Personal gap
What is Consensus anyway?
That would be your first question if you were preparing yourself to host a corporate governance course! Consensus does not necessarily mean unanimity. Consensus means reaching a point where different viewpoints have been listened to, and no one is going to stand in the way of us moving forward. Everyone “consents” to move forward, but not necessarily everyone agrees with the specific direction.
“Consensus” comes from the Latin, “feeling together”. It may be that everyone is of one accord, or it may be that dissenting views have been dealt with to the satisfaction of the dissenters: consensus means “unity, not unanimity”.
Consensus decision-making is a group decision-making process that seeks the consent of all participants. Consensus may be defined professionally as an acceptable resolution, one that can be supported, even if not the "favourite" of everyone.
It may seem counterintuitive that two of the most visible trends in modern governance are to strive for decision-making by consensus rather than just a majority vote and to encourage dissent and divergent views from the one being proposed. Yet these two potentially conflicting forces can be brought into harmony, by exploring and better understanding the root causes behind the dissenting view and using the most effective tool to address and deal with each, to bring the dissenter into the consensus.
Here is how Board and Committee Chairs and Members can use this in practice during meetings:
- Have the proposed solution (e.g., strategy, decision, problem, or issue) presented briefly;
- Invite Board members to express any additional or different perspectives;
- Once these divergent views have been expressed, move on to convergent thinking (consensus building) by exploring the root causes of each divergent view (the Chair may need to “name” or explicitly articulate the divergent view since the stated dissent is often not the underlying cause), and proposing that each be dealt with based on addressing its root, including amending and revising the proposed solution;
- Probe and test for consensus: do we have consent to move forward on this path?
Information Gap
One typical root of dissent is a lack of information – “I don’t have the right information to make this decision”, “management does not have the right answers to my questions”, or “I received this information too late to properly prepare for this decision”.
In this case, the Chair needs to evaluate whether the information gap is legitimate, and if so, if it is important enough to trump the urgency of making this decision at this meeting. If so, the Chair should table the item to the next meeting (or schedule a special meeting, perhaps by conference call or video conference), and make sure that management is clear on the Board’s expectations for the “right” information (content, form, and timing) for that meeting. The dissent is legitimate and carries the day, let’s move on to the next agenda item.
If this is not the case, the Chair may need to negotiate or broker an agreement between the dissenting board member and management or the rest of the Board. It may be that management and the Board assess that the decision is too urgent to be deferred and that the information, while imperfect, is sufficient to act on. The Chair should test both management on true urgency, and the rest of the Board members on the sufficiency of information. The brokered agreement may be “let’s approve this today but make sure we see the missing information on our board portal in the next 10 days?”
Knowledge Gap
Another typical root cause of dissent is a lack of understanding, because of a lack of familiarity with the strategy or business model, the organization or industry, or even culture or tradition.
In a perfect world, Board meetings are not intended to be training sessions, and the onus is on individual board members, especially new board members, to identify knowledge gaps when they are preparing for the meeting. They should then find ways to address these before the meeting, if possible, through engaging with management or other Board members, or undertaking research and reading.
In the real world, every Board meeting hits “road bumps” where it is clear to everyone (except perhaps the individual themselves), that a Board member is raising objections or asking questions because they have a knowledge gap.
The Chair needs to do triage and decide if this is sufficiently important, and if there is enough time, to conduct “on-the-job training” for the Board member. Often if one new board member raises questions, there are other more experienced board members who are thinking the same thing, but don’t want to “sound stupid” or ask a “dumb question”. The Chair needs to exercise discretion here, and let management address the questions or objections – this may be a great opportunity for everyone to fully explore and test underlying assumptions that may have been implicit. Bridging the knowledge gap is often a way that strong boards fulfill their fiduciary duty with diligence, rather than a sign of weakness – and a corporate governance course could help.
Urgency and time constraints may trump the Chair’s desire to fully address each board member’s learning needs, though, and the Chair may need to propose an off-line session for the individual with the CEO or VP and suggest that the consensus of the Board is to move on.
Direction Gap
One of the most difficult areas of dissent to deal with is a fundamental divergence of views on a big “why” or “where” question: one or more board members simply do not agree with the direction that a strategy or decision would take the organization in.
A direction gap may be the result of a new board member who did not share the board’s journey during strategic planning. For that reason, we recommend to Boards that a strategic update session be scheduled for the full Board not long after the AGM and new board appointments. It’s not good enough to just send new board members to an orientation session and expect them to be inducted and aligned with the strategic direction and priorities of the organization. For December year ends, the AGM and/or board elections/appointments generally occur in Q2 (April – June) and so a summer strategic retreat every year is good timing to engage new – and all – board members in a dialogue on the strategic direction. “Engage” and “dialogue” are key here – this is two-way communication, both experienced board members and management briefing the new board members on the thinking, context, and rationale behind the words in the mission, vision, values, goals, and objectives and new board members sharing their thoughts, ideas, suggestions, and questions about the strategic direction and priorities.
These annual update sessions are enriched with strategic updates on the agenda of every board meeting, which provides management with the opportunity to brief the board on key priorities and risks/opportunities. It also gives all board members the chance to evaluate the strategy in the light of the present.
A more profound challenge arises when a board member does not agree with the strategic direction or priorities, even following extensive exchange and discussion. Sometimes such a board member stays on the board and acts in a challenging function, expressing “minority” views and sharply evaluating progress. But such a board member needs to be able to engage constructively and take care not to become a burr in the saddle of the board and CEO. In that case, it may be time for the dissenting board member to acknowledge that their view did not carry the day and it is of little value to stay and fight a rearguard action.
The Chair needs to exercise discretion in this case, too, and generally, this situation calls for a one-to-one meeting between the Chair and the dissenting board member to gain a full understanding of their objections and map out (agree on) a course forward together that retains consent without quashing dissent.
Strategy Gap
Often the most common substantive cause for dissent, and one of the least quick to resolve, is a strategy gap – a board member holds a dissenting view on “how” something is to be done.
This has a couple of layers – one layer is that this is not about “right and wrong”, there is room for legitimate divergent viewpoints on whether a strategy is going to work or is better or worse than another. In this case, the Chair should make sure that time is set aside for a full dialogue on a substantive disagreement. Here, the Chair’s agenda planning, and board members giving the Chair a “heads-up” about hot-button agenda items, are tools to help the Chair make sure that enough time is available to set aside for substantive dialogue. If consensus is not being reached and there is still substantive dissent on “how”, then the Chair may have to decide about deferring the item to a future or special meeting or finding a way to get the dissenter to consent to move on.
One tool – often taught in the corporate governance course world – is to add a “red line” to a strategic decision. For example, if a board member feels strongly that a strategy is not the best course, but the rest of the board and management are on the side, then the Chair may suggest adding a timed evaluation to the decision – e.g. in 90 days, management will track and report on progress on this metric, and if we are not hitting the projected milestone targets, then we’ll bring this back to the board for further discussion. Red-lining is a tool that, used judiciously, builds consent while honouring dissent.
The other layer, related to this, is the risk of the board going over the board-management line and into micro-management. In fact, the whole concept of red-lining is that it is an exception, in most cases, these would be management matters, but because of the material risk expressed at the board, and in order to move forward, an exception is being made and everyone is aware of why and how this will be returned into management’s hands (hitting the milestone targets or amending the decision.)
Political Gap
Sometimes a board member feels that they need to dissent in order to make a point. An example is philosophical or values-based – maybe a pro-labour board member objects to the organization getting involved in a P3, but the rest of the board and management team is clearly on-side. They’ve listened to the dissent (probably more than once) and there is no point in bogging down the board meeting with further back and forth.
In this case, the Chair may just need to suggest that the dissent be recorded in the minutes. And in order to protect boardroom confidentiality, and to give all board members guidance on maintaining their fiduciary duty of loyalty, it may be a good idea to agree on “talking points” outside the boardroom after the meeting. Finding a way to incorporate the dissenter’s view while expressing the corporate direction can take some wordsmithing but it is better than divergent views being expressed outside the boardroom, or a dissenter feeling shut down and shut up. Every board member’s view counts.
Personal Gap
A final possible root cause of dissent is a personal gap – a board member just wants to “play the devil’s advocate” or worse, their emotional maturity and self-awareness is so low that they don’t even realize that they are being a fly-in the ointment of a smooth board functioning.
In this case, the Chair has the responsibility to take the board member aside (not at the meeting, but during breaks or between meetings) to coach them and give them feedback on how to express dissent – on substantive, material matters, not personal or trivial ones.
If examples of this persist, the Chair should seek permission from the rest of the board to be more assertive in exerting board discipline during meetings.
It is a tough balancing act being a Chair, not wanting to quash substantive dissent, but needing to seek consent to move through multiple agenda items. By better understanding and identifying the root causes behind dissent, Chairs have practical tools to build and achieve consensus decision-making around the boardroom table.
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