Resolving disputes

Disputes in the boardroom can undermine board effectiveness and organisational performance, but adopting certain approaches and processes before and after they occur is imperative in handling such situations if and when they arise.

According to an article featured on the Better Boards website by James Beck, managing director, Effective Governance, there are a number of steps that directors must put in place to help prevent, or manage, boardroom disputes.

Beck says that in accordance with their fiduciary duties to the organisation, directors have a responsibility to implement good governance and the board is expected to operate collegially. While each director brings to the boardroom their own particular skills, knowledge and experience, and has a duty to apply those skills, knowledge and experience, sometimes, when doing so, the discussions within the boardroom can often become robust, and it is easy for this to turn into a conflict. Similarly, conflicts can also arise for a myriad other reasons.

Therefore, Beck counsels that many disputes would not occur had some very simple steps been taken. These include:

  • Ensuring alignment of directors with business purpose and values.
  • Clear definition of board role.
  • A board culture that encourages open and frank discussion.
  • A board that actually know each other and the management.
  • A dispute resolution process for the business, including the board.
  • Regular board performance evaluations, including the chair. 

The full article can be found here.

A link to an example board dispute resolution policy can be found here.