In a recent conversation with a director who has held the lead director position in a number of public companies, the question arose—when is a lead director really independent?
The director I was speaking with said a major problem on many boards is that a director is often reluctant to raise an issue, or make a strong comment, if he/she knows the chairman will not be supportive.
To address this, he, as the lead director, established a “post formal meeting session” with the outside directors only. The initial reaction of the chairman was non-supportive (nice way of saying he got angry). However, at the post meetings, significant information and thoughts were surfaced. These brought information to the board, and especially to the chairman, that otherwise would not have been presented.
This milestone was accomplished by insisting that the chairman, at the end of the meeting excuse himself from the meeting while the lead director met and discussed issues with the remaining directors. The lead director then reported to the chairman in his office without stating “who said what” and fully debriefed the chairman. He was met with this evaluation: “I learned more from you in the last 30 minutes about my board than I have in the last three years!”
Why is this? Because directors will tell a good lead director concerns that might not otherwise get voiced. The lead director can then brief the chairman and not mention names—just general themes, thoughts, and recommendations.
We have all heard of company values. Today a focus on the board’s “behavioral values” that create true independence involves courage—courage to challenge, to listen, to do what’s right for the shareholders even when strong leaders get angry. In fact, these are behavioral values that apply to all leaders.
Tracy Houston
Tracy E. Houston, M.A., is the president of Board Resources Services, LLC. She is a refined specialist in board consulting and executive coaching with a heartfelt passion for rethinking performance, teams and the boardroom. Her company, Board Resource Services, LLC, is online at www.eboardmember.com and www.eboardguru.com. You can follow Tracy on Twitter @BoardGuru. Headquartered in the Denver, Colorado area, Tracy is an avid hiker.
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That is because leadership takes more than having a position. It is also important that the person in the position has the values to not only sustain the position but also to do the right thing for his or her subordinates.