Ambidextrous Governance? Explained

Ambidextrous Governance? is an innovative concept developed by Jean-Francois Henri FCPA, Ph.D, ASC, C.Dir FCPA, Ph.D, ASC, C.Dir ASC, Ph.D., FCPA, Educational Director of the Collège des administrateurs de sociétés, to improve the effectiveness of Boards of Directors (Board). This approach explains why Boards of Directors of similar size and practices can have different performances, by emphasizing their ability to balance contradictory aspects of governance.

The heart of ambidextrous governance lies in the search for a balance between several essential dualities. A truly ambidextrous Board manages to reconcile these opposing aspects without excessively favoring one or the other. The main dualities to balance are:

The monitoring role vs. the advisory role

An effective Board must both exercise control over management's past actions (fiduciary role) and participate in the development of future strategies (strategic role). An imbalance toward oversight can hinder the development of the organization, while too much advice can lead to a lack of management accountability.

How the organization works vs. how the board works

It is crucial to find a balance between discussions about the strategy and performance of the organization and those about the internal procedures of the Board. Too much focus on the organization can harm the effectiveness of the group, while too much attention to internal operations can cause the fundamental issues to be lost sight of.

Financial issues vs. environmental and social issues

An ambidextrous Board places a balanced emphasis on financial results and social and environmental responsibility issues. Neglecting either aspect can either compromise the sustainability of the organization or ignore its societal role.

Cohesion vs. diversity of points of view

It is essential to cultivate a team spirit while encouraging the expression of varied perspectives. Excessive cohesion can lead to harmful groupthink, while too much diversity of opinions can hamper decision-making.

Small size vs. diversity of profiles

An ambidextrous Board strikes a balance between a limited number of members to facilitate exchanges and sufficient diversity in terms of expertise, experience, gender, age, and ethnocultural origin.

To assess the ambidexterity of a Board, Jean-Fran?ois Henri proposes a series of questions (French only) to identify potential imbalances. These questions invite Directors to reflect on the relative importance given to each aspect of the dualities mentioned. A "yes" to one of these questions signals an imbalance and suggests that the Board is not fully ambidextrous.

Ambidextrous governance thus offers a framework for reflection to improve the performance of Boards. It encourages directors to be aware of the tensions inherent in their role and to actively seek a balance. This approach helps avoid potential abuses related to an excessive focus on one aspect to the detriment of another.

In practice, adopting ambidextrous governance involves regularly assessing and adjusting the balance between these different dimensions. This can be translated into structuring meeting agendas to ensure balanced coverage of topics, a thoughtful composition of the Board to represent diverse perspectives, and a culture of open discussion where all points of view are valued.

In conclusion, ambidextrous governance offers a promising model for improving the effectiveness of Boards of directors. By recognizing and actively managing the tensions inherent in governance, Boards can better fulfill their complex role of oversight and strategic direction, thereby contributing more effectively to the success and sustainability of the organizations they serve.

This article was originally published by in French in La Presse on March 23, 2022 and is available on the website of the Collège des Administrateurs de Sociétés (French only).