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How To Resolve Board Disputes

How to Resolve Board Disputes

The board handbook offers a wealth of knowledge about who the board is and how the directors should be working together to make strategic plans according to the organization’s mission. The same idea holds true for corporations and non-profit organizations. It may seem strange to add policies to the bylaws about how to handle conflicts before a dispute has even taken place; however, in reality, boards should expect and anticipate robust debates before making most decisions. Policies and procedures should support this process.

When boards have standards of how directors should approach conflict and they have a clear path to resolving them, debates and disputes will likely be healthy and productive. Boards that can’t progress beyond debates where tempers flare, and where there is a lot of infighting, will not come to well-rounded conclusions. Directors are likely to start a chain of resignations, which means the remaining board members will need to start the process of rebuilding. Turnover in directorships inhibits the work of the board.

Why Board Directors Stay and Why They Leave

In a white paper by Marion Peters Angelica, author of Keeping the Peace: Resolving Conflict in the Boardroom, Angelica cites a study that included more than 50 non-profit boards in Minnesota that found that the reasons people joined non-profit organizations were to “network, make friends, and do good.” The study also showed that board directors left boards to avoid conflict more often than for any other reason. When major conflicts bubble up to the surface and board directors start taking sides, it’s not surprising that board directors start dropping like flies, thinking, “This isn’t what I signed up for.”

Could Getting Along Great Be a Red Flag?

Board chairs and managers sometimes breathe a sigh of relief when much of the board is on the same page over an agenda item. While it’s good that the majority of the board agrees on things, that’s not the kind of scenario that should be expected or accepted at every single meeting.

According to businessman Sudhanshu K. Tripathi, Group President of Human Resources at Hinduja Group, who sits on various Hinduja company boards, healthy boards are active, independent and diverse. Tripathi also states that boards that don’t have disagreements during board discussions make for a weak, unproductive board.

Forms of Board Conflict

Conflict transcends corporations and non-profit corporations in many of the same ways. Conflict often happens in the boardroom between board directors, which an effective board chair should be able to resolve.

Another source of conflict is when one or more members of the board disagree on a major issue with the executive director. Again, the board chair has a strategic role in bringing both sides together, although board directors and the executive director also have responsibility for their own behavior and their approach to solving the dispute. Board chairs need to remind board directors and managers to respect the fact that they each have differing types of authority and to work toward developing mutual trust. Sharing information between parties should be expected on both ends and should not be a reason for either party to be on the defensive.

Disputes sometimes occur because board directors disagree on a policy, process or procedure. They can also occur because the board directors don’t have a good understanding of what managers are doing. Increasing communication is often helpful in resolving this type of conflict. Sometimes it helps to bring experts in to help resolve difficult disputes.

The Role of the Board Chair in Resolving Disputes

An effective and experienced board chair can be instrumental in managing board director behavior and in resolving disputes between the board and managers as well as conflicts between board directors.

The board chair needs to assess the topics for discussion and move more quickly through agenda items where everyone agrees or where there is little conflict. This strategy allows time for the board to thoroughly vet other issues where the board directors and managers bring varying perspectives on an issue.

It’s also important for the board chair to bring the full board into issues where there is potential conflict early on. When a handful of board directors have studied an issue at length and hold strong opinions on it, the remaining board directors may feel that they don’t have time to get up to speed on it before making an informed vote. Bringing the full board into an issue while it is new gives each director the same opportunity to form an opinion and to offer their perspective without feeling overpowered by other directors.

When introducing a topic for discussion, the board chair needs to frame the issue positively. The chair should also define the outcome (not the vote) before the debate starts and define clear rules for discussion. When introducing new items for discussion, the board chair may remind the board directors that they need to recognize the importance of bringing diverse perspectives into the discussion and seeing all sides of the issue before bringing it to a vote.

The Role of Board Directors in Resolving Disputes

Board members can’t expect to do it all. Each director has a responsibility to be informed and collaborative in the boardroom. They need a willingness to accommodate each other’s views and to maintain a level of respect and comfort for their fellow directors and management.

It helps for board members to approach each new board agenda item with a spirit of inquiry and a desire to learn more about it from those who know the issue best. That doesn’t mean they should accept their peers’ perspectives on the surface. At times, board directors may need to do their own research to share with other directors.

Board directors need to treat their peers as comrades rather than adversaries, giving them the benefit of the doubt. They should approach discussions with the goal of learning rather than winning.

When things in the boardroom are regularly getting heated or out of kilter, board self-assessments are a good tool to help get everyone back on track.

Concluding Thoughts About Resolving Board Disputes

No one likes conflict, and most people will avoid it if they can. Discussion and disputes are necessary for a board to do the important work that comes before it.  The design of corporate governance structures and principles are tools that give boards an identifiable format for resolving disputes where everyone feels respected and valued.

Resolving board disputes for the good of the corporation means that the board directors, board chair and managers need to fully understand their roles and stay in their own lanes. Each of them needs to take responsibility for their own behavior when it doesn’t work for the good of the whole. Using tools like governance structure, bylaws, rules of order and self-assessments helps bring everyone together when things veer off track.

To improve communication through the board, a board portal should be considered. This can keep all board notes and discussion topics in one place, which is easy to manage for a board chair while also giving the ability for other members to review anything that was discussed. This will be a much easier way to solve disputes and allow board meetings to be more organized.

Jeremy Barlow

Jeremy is the Director of Digital Marketing at BoardEffect.

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