How should a board deal with conflict and division between directors?

• Conflict between board members is quite common
• Not all board conflict leads to damage and trouble
• Left unaddressed, relationship conflict escalates and can damage a board’s ability to make good decisions
• Effective governance requires an open attitude toward a potential conflict
• Good corporate governance emerges from an awareness that dissent needn’t mean division
• How to share a framework that embraces disagreement

How does a good Chair stop board division from occurring when dissent and challenges between members descend into conflict?

Company directors must challenge each other’s ideas, and dissent is not the same as division.

According to a study published in the CPP Global Human Capital Report, “U.S. employees spend 2.8 hours per week dealing with conflict, equating to approximately $359 billion in paid hours in 2008.” Meanwhile, conflict seems inevitable, with an overwhelming majority (85%) of employees at all levels experiencing conflict to some degree. Shockingly, the same report reveals “27 per cent of employees have witnessed conflict morph into a personal attack, while 25 per cent say that the avoidance of conflict resulted in sickness or absence from work.” No wonder Monday has a bad name.

The conflict endemic to the watercooler extends into the boardroom, where rapidly changing compositions suggest an increased potential for smashups. According to Harvard Business Review, in 2019, a record 59 per cent of the directors added to the boards of S&P 500 companies were women or men belonging to a racial or ethnic minority group. Good news for achieving social and economic justice. But the good can quickly turn to goad without careful management. Adding unprecedented diversity creates a welcome greater multiplicity of perspectives, and this lively emergent variety of viewpoints necessarily complicates rather than eases communication. The attendant communicative complexity—what we might call dissent—does bear some precarity.

According to a study published in the Journal of Management and Governance, “Conflict in the boardroom: a participant observation study of supervisory board dynamics,” the widely held view regarding conflict on boards urges “social cohesion and harmony for board task performance.” Earlier research has suggested that “performance improves when members are naturally drawn to each other and want to stay on the board.”

Threats of financial loss and organisational disruption encourage leaders to squelch disagreements in favour of group connectedness. However, the researchers warn “not to overstate the importance of social cohesion for boards of directors.” Through their observations, they found that not all board conflict leads to trouble. The organisations that thrive most fully leverage differences of opinion to perform at the highest level. Of the three types of board conflict—task, relationship, and board-to-CEO, task conflict protects best against risk.

Absolute social cohesion creates vulnerability through group-held confirmation bias, while “multiple viewpoints and a more careful evaluation of alternatives improve the quality of decision-making.” Vigorous dissent during “task conflict helps boards to avoid inferior decision-making and groupthink.” The idea that differences of opinion create organisational agility makes sound sense. But, those varying opinions can suddenly skip the track into­­­ relationship conflict.

Task conflict, which helps a board govern most effectively, also triggers relationship conflict, which can seriously undermine corporate governance. Boards need to recognise when task conflict has taken such a turn. When resistance arises between people due to thinking or communicating rather than around particular solutions to a task, relationship conflict has begun rumbling. The debate starts veering personal. The topic under discussion shifts, and operational effectiveness jerks out of view.

Relationship conflict has a profound potential to derail organisational functioning because although “high task conflict can be positive for board task performance, [as] it increases the quality of strategic decision making, it can also trigger relationship conflict, which in turn decreases board task performance.” At such times, many members might use avoidance as a strategy to steer the conversation back toward the task at hand.

However, governance bodies should beware of any tendency toward avoidance. Left unaddressed, relationship conflict escalates organisational problems, as “the avoidance of relationship conflict negatively impacts board task performance and may lead to ‘cognitive blindness.’” Then, a corporation may become the proverbial train wreck. Because “task and relationship conflict are interdependent,” boards welcome task conflict while coping with relationship conflict, including implementing strategies for how to deal with conflict in the boardroom.

Effective governance requires an open attitude toward potential conflict. Suppose a board has established the expectation that disagreement is not only inevitable but welcome. In that case, that dissent is to be promoted rather than dodged, directors posting ideas may tend more readily to accept disputation. Boards that frame their activities through a “conflict-oriented model of board task performance” appear to enter deliberations more able to focus on the task at hand, steering clear of the dreaded relationship skirmish. A clear sense of purpose engenders debate is “a crucial prerequisite for the participation and trust development within the board.”

Uniting around shared beliefs and explicitly stated working rules for engaging in heated discussions “provides a fertile ground for task conflicts and might prevent task conflicts from triggering dysfunctional relationship conflicts,” while also addressing how to deal with conflict in the boardroom. However, emboldened directors that head routinely toward conflict can make for a forward going group. The chairperson’s role will need to adapt accordingly. Naturally, “effective chairperson leadership is a prerequisite” for the benefits conferred by task conflict.

Chairperson leadership within a conflict-oriented board requires effectively navigating the tight twists and turns of a lively discussion. How does a Chair deal with conflict in the boardroom? In “Good Conflict Makes a Good Board,” researcher Solange Charas reports finding “that there is something powerful about the way directors speak to one another, especially when they disagree.” Interviewing directors at 22 small- to medium-sized publicly traded companies about board practices and dynamics, Solange found that high-quality governance requires directors remain vigilant in response to any arising tension, taking care to steer the conversation away from people and toward tasks.

Companies who scored poorly in governance reviews allowed the conversation to trend toward “personal differences or shortcomings between people.” Here is Solange’s example of overheard ineffective speech that did not manage the potential for relationship conflict: “I don’t think you have good ideas, and you don’t understand the issue.” The tension ratcheted up by that sort of commentary rearranges atoms. Hair goes up on the backs of necks.

While at least this speaker begins by owning their point of view with “I don’t think,” acknowledging that the negative opinion given does not represent absolute truth, what follows would rankle most any listener due to these linguistic features:

• “You” rather than the idea as the subject focuses criticism on the person addressed.
• Language of value judgement (“good vs bad”) rather than the language of practical use (“will work”) suggests the topic under discussion is an essential moral
• question rather than one of operational effectiveness.
• The second-person pronoun repeated, “you”, draws a firm line between the speaker and the listener, inviting an oppositional relationship.
• Focus on the negative, “don’t understand,” tempts a defensive response.

Tasks get put aside with this sort of interpersonal sparring, and the organisation’s operational targets slip from view. How many people would stand by for such inept collaboration? Turns out, not many. A combative atmosphere creates structural instability, resulting from the fact that 1 in 4 directors leave boards embroiled in what Solange calls “affective conflict”, experiences governed by exchanges that laypeople call “just plain rude.”

To keep a relationship conflict under control, directors do need to mince words. Good governance “stimulates conversation around topics, addresses ideas or points of view with an opening for directors to offer something creative, innovative and positive.” Companies in the study who scored well in governance reviews led conversation away from personal condemnation.

Here is Solange’s example from the study, a bit of effective speech between board directors that prevented escalations of relationship conflict: “I don’t think your idea will work, maybe we need to look at it a different way…have you thought of this?” Several linguistic features can characterise such courteous speech:

• “I don’t think” emphasises the speaker’s analysis as merely one idea among many.
• A statement of uncertainty, “maybe,” positions the suggested change as a possibility rather than necessary.
• The collective pronoun, “we”, includes the speaker with the listener, creating unity.
• Ending with a question rather than a demand opens up conversation, invites the listener to participate.

Steering directors toward the second of these two exchanges can shift competitive advances by individuals into collaborative advancements for the organisation.

Good corporate governance emerges from an awareness that dissent needn’t mean division. High functioning governing bodies recognise that dissent can mean the difference between success and failure. Research reported by the Harvard Business Review in “What Makes a Good Board?” concurs that “conflict has a bounty of positive potential, which if harnessed correctly, can stimulate progress in ways harmony often cannot.” On effective boards, “members of the board began challenging each other — and listening to each other’s viewpoints — it led to positive outcomes. Good healthy disagreement led to good decision-making.” A house divided will fall, but one united through governance by lively civil debate may endure and thrive.