BOARD AND CORPORATE LEADERSHIP – REVIEW & RETHINK – PART I

Leadership is required and can be developed and provided in a variety of situations and circumstances. Community, Corporate and Team Leadership as well as business, social, political, scientific, intellectual, moral, thought and other forms of leadership can overlap and combine in different ways according to changing requirements. From time to time, directors must review the nature of leadership they and colleagues are providing in the contexts in which they hold board appointments and exert influence.

Leadership is needed at all levels and across an organization and its network of relationships. Directors and Boards need to know what types of leadership to exercise and/or delegate, also when and where. Those for whom they are responsible should be clear about what is expected of them and properly supported. The potential to make a significant difference can exist throughout a company. Good ideas and promising initiatives can arise in many places.

CORPORATE LEADERSHIP

For many employees, the CEO is the person associated with corporate leadership, although acting within the framework of direction, values, purpose, policies and priorities established by a Board of Directors. While the business of the board is conducted by its Chairman, the CEO leads the Executive team. The roles of Board chair and CEO may involve different but hopefully compatible forms of leadership towards particular external stakeholders.

In certain companies, the boundaries between Board and Executive Leadership sometimes overlap, especially in evolving situations. Compatible personalities and aligned perspectives sometimes allow joint or collective leadership, but these can be difficult to sustain. Dialogue and a good working relationship between those involved is required.

Effective leadership involves mutual respect and trust, good relationships between key players and important stakeholders. While issues remain unresolved, leadership voices may need to exhibit a degree of alignment and a united front to the external world until a consensus is reached and a common position can be shared. This can require listening leadership that is sensitive to changing stakeholder concerns and priorities and relational leadership,or taking the initiative and being responsive in building relationships with them.

ESTABLISHING LIMITS

Board discussion of which approach to leadership to adopt encourages certain directors to be more interventionist and interfering when and where this is not required. Some executive teams can be trusted to get on with the implementation of an agreed strategy without board members looking over their shoulders.

People can be over-led. They may need space to grow and do what they feel is best. The cult of personality that sometimes accompanies individualistic leaders can overshadow others and lead them to withdraw into darker corners. More collectivist and democratic forms of leadership can be better at widening participation and encouraging discussion and debate. To work well, it requires secure personalities who are open to ideas and invite challenge rather than seek to avoid it or stifle questioning.

At a time of discontinuity and uncertainty, new ideas and initiatives may be sought. More democratic approaches may be required to encourage engagement, involvement and participation, and enlist interest, commitment and support. It may be necessary to build a shared purpose and a consensus for moving forward. For best results, such an approach should include key customers, important suppliers and business partners whose active contributions are likely to be essential for success.

The adoption of such approaches might need to be accompanied by a review of governance arrangements and mechanisms for ensuring alignment, raising of issues and settlement of disputes. There may also be implications for the management and distribution of intellectual property and the sharing of financial rewards.

INDIVIDUAL AND COLLECTIVE LEADERSHIP

Charismatic leadership can sometimes be attractive to those who like to be led, but may not be everyone’s cup of tea. In certain cases, charismatic leaders can serve their purpose, but it may become difficult to remove them. Independent Directors should be alert to leaders who overstay their welcome, keep rivals down, block challenges and begin to exhibit the attributes of a tyrant.

Authoritarian, dominant and exploitative forms of leadership are often not in tune with contemporary requirements for caring commitment, environmental awareness and concern, agility, flexibility and sensitivity. People tend to resent being used and either taken advantage of or taken for granted. They are less likely to go the extra mile when required, but more likely to jump ship as and when a better opportunity appears or an escape route arises.

More consensual forms of leadership may be better at holding people together, but when a window of opportunity to act is rapidly diminishing, this should not be at the expense of decisive leadership. Servant, supportive and enabling leadership can work well in more stable situations, when the people of an organization know what is required to succeed. During a period of instability and flux, more than monitoring, reacting to requests for help and taking pride in not interfering may be required.

Collective leadership that embraces a competent executive team and to which they contribute can be particularly effective at encouraging ownership and commitment. Leadership that is imposed, or to which people are subjected, can cause more passive responses. The active involvement of others can result in a more participative form of leadership. Co-operation with other entities and co-creation can stimulate a requirement for more collaborative or shared leadership.

ADAPTING AND EVOLVING LEADERSHIP

Leaders must know when to change gear and put more emphasis upon becoming a catalyst and a trigger of change. People may have to be challenged, inspired and encouraged rather than largely left alone because of what they have collectively achieved in the past. Untapped potential may need to be released and new elements introduced. A more entrepreneurial approach to leadership may be required. May be the corporate culture has to change to match a technological revolution or rapidly changing customer requirements.

Sometimes, an approach to leadership may need to be better aligned to that of joint venture or consortium partners. A change of style may be required to match that of a key customer with which a company wishes to become a longer term strategic partner and work more closely. Legal and regulatory changes, Government policy changes and international agreements sometimes have implications for how business leaders have to behave.

During discussion of what approach or approaches to leadership to adopt, directors must revisit the company’s mission and purpose and also what they are collectively trying to achieve. The approach that is selected might be more appropriate if it is viewed as a means to an end rather than an end in itself.

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