Voted Off The Island - How To Remove Problematic Board Members

(Originally appeared in the November 6, 2018 'Across the Board' publication, a Board Director, Board Advisor, C-Level, and Business Newsletter reaching 27,000+ exceptional business leaders in over 70 countries with articles focused on leadership, strategy, and governance topics - sign up here)

It's a fact. Demands of Boards and Board Directors are increasing. This is true of CEOs, too. The simultaneity of an increasingly connected world, accelerating technology advances, shortened innovation cycles, and ability of startups to upset established companies' business models overnight forces even the most savvy Boards to challenge themselves. The implications are clear - the days of one, or just a few, dedicated Board Members carrying the rest of the Board are no longer possible - a trend that has become painfully clear to many private, public, and nonprofit Boards alike. Now, every Board Member counts in both the success of the collective Board as well as the relevance of the organizations they serve.

Your 'Board Architecture' matters and every Board Member should have a specific role. With this in mind, what do you do when your Board has one or more duds causing noticeable gaps in effectiveness? It is absolutely time to make changes. ...But how? How do you get rid of ineffective Board Members? This is not an easy undertaking, but many situations require exactly this course of action.

Removing ineffective Board members is admittedly one of the most dreaded actions of Board Directors. It can be messy, cause unwanted publicity, and damage professional relationships. Navigating these treacherous waters should be done with caution ...and with the point of arrival defined as ensuring an effective Board as the paramount consideration. A great way to look at this is to define the 'end goals,' outcomes that the Board is steadfast in achieving, vs. 'means goals,' the defining of various paths to reach the end goals.

Typically, in my articles I prefer to offer a best way to accomplish goals along with additional options for consideration and thought. For this topic, I am not sure there is a best way to remove a Director due to limitless scenarios, but I have ordered the following options from 'most amicable' to 'path of high resistance.'

• Term Limits: Ensuring that your Board's bylaws include clearly defined term limits is a proactive way to stave off potential long-term issues with disruptive or ineffective Board Members. At the end of the term, this Board Member simply rolls off the Board. The option to 'renew' a Board Member's term can be included, but this option creatively allows for ineffective Board Members to leave gracefully. Of course, actual Board terms (typically in years) along with 'staggered Board' considerations need to be weighed.
• Resignation Opportunity: Initiate a 1:1 discussion, led by the Board Chair or designated Board Member, and take the opportunity to pose the question of motivation, performance, and fit to the challenged Board Member ...then listen. Intently. I have personally experienced situations where a Board Member feels frustrated and marginalized due to concerns with Board operations, Board decorum, and other valid points. In some cases, these deficiencies can be addressed by the collective Board and the situation righted - saving a potentially great Board Member while simultaneously correcting situations that help the overall Board become more effective. When this approach is not an option, allowing for a Board Member to resign and exit the Board on their own terms is in the interest of all parties.
• Removal by Leave of Absence: This is an opportunity to infuse 'mindfulness' into the discussion. During the 1:1 discussion, it may be discovered that the challenged Board Member has personal issues causing undue changes in behavior, attitude, and involvement. Defining a predetermined period of time for a voluntary leave of absence may relieve and correct the situation. As defined in the leave of absence agreement, time needed in addition to the decided term can be considered a resignation. (Note: the Board bylaws need to clearly state the voting and involvement rights of a Board Member on a leave of absence along with quorum considerations).
• Removal by Impeachment: This is the messiest way to accomplish your goal, but is sometimes the only way forward. Impeachment should be considered a last resort for only the most serious offenses by a Board Member. An impeachment is simply a vote by the Board to remove the Director in question from the Board. Board bylaws should clearly call out the process of impeachment as well as the scenarios in which impeachment is warranted. Detailed documentation of all aspects of the impeachment process (incidents, responses, etc.) are in the best interest of the Board.

With all of the above mentioned options, ensuring very specific job descriptions for all Board Members from the onset, including termination clauses, can help in eliminating justification for a Board's removal actions in potential court cases. Further to this proactive approach reference, proper and in-depth due diligence to lower the risk of seating ineffective or poor performance-prone Board Members should be undertaken (much more detail on how to create a Board candidate assessment plan can be read in chapter 13 of 'Across The Board: The Modern Architecture Behind an Effective Board of Directors').

So, what does the data say about the need for removing ineffective Directors? PwC's recently released 2018 Annual Corporate Directors Survey is quite telling. Surprisingly, it shows that "45% of Directors think at least one Director on their Board should be replaced. More than one in five (21%) think two or more Directors should go." With this level of dissatisfaction, it seems like more Boards will be enacting their removal clauses in the near future.

All of the mentioned Director removal approaches, with slight nuances when applying to either private, public, and nonprofit Boards, can be quite effective in ensuring the future and ongoing effectiveness of your Board. It's just the initiation of the process that is hard for most Boards to swallow.

How will you ensure 100% value from your Board?

Reach out directly to Mark A. Pfister to ensure your Board's proper roles and responsibilities with his 'Strategic Board Services' offerings and 'National Speaking Tours.'

_______________

** WIN A FREE BOOK **

Email me with a short description of how you have removed problematic Directors from your Board for 5 chances to win a free signed copy of my book, 'Across The Board: The Modern Architecture Behind an Effective Board of Directors.' (Eligible for book shipping within continental U.S.)

_______________

About the Author: In addition to sitting on numerous Boards, Mark A. Pfister is a 'Board Macro-Influencer,' a certified Board Director, author, and advises public, private, and nonprofit Boards in efficient and effective operations. Known as 'The Board Architect,' he is also the inventor of the 'Board as a Service' (BaaS) engagement model and an expert project manager frequently advising on strategic global initiatives in their initiation and operational phases...<< read full bio here >>

_______________

_______________

_______________

'Across The Board'

The Modern Architecture Behind an Effective Board of Directors

In order for Boards, and the organizations they serve, to reach the level of trust, effectiveness, and operational excellence needed to excel, the ‘Foundational Architecture of the Board’ must be solid and constructed properly. An area that seemingly has never been covered or is skipped over is the actual ‘nuts & bolts’ foundational and architectural considerations of how to build a Board from scratch, or how to envision the rebuilding or evaluation of an existing, in-place Board. This has been the case over and over again in private, public, and nonprofit organizations - until now... Get your copy today.

?Reached Amazon's "#1 New Release in Corporate Governance" in its first week of launch!

Recent Book Signing Event

_______________

Have Mark join you on his National Speaking Tours (14,500+ attendees / 80+ speaking engagements in 2017)

'Becoming an Exceptional Board Director Candidate' Learn the proven and effective steps to plan and implement your Board Director strategy. Experience how these achievable & focused efforts help you convey the expertise and confidence needed for serious Board Director / Board Advisor consideration (Available as a speaking engagement and/or a 1:1 individualized preparation coaching plan).

'Building an Effective Board For Your Company' shows business owners and leaders the immense value of creating or rebuilding an experienced 'go-to' Board of Directors or Board of Advisors - and most importantly, how to do it via a step-by-step roadmap. Make your company soar with the right foundational elements of an effective Board. (Available as a speaking engagement and/or consulting engagement).

'The Strategy of Strategy' guides you through the 2500+ year history, evolution and next phase of Strategy - 'Amorphic Strategy.' Learn why strategy is so relevant to you personally as well as your business. Build and leverage your business strategy as well as your own personal strategy and experience how these focused efforts will help you thrive and reach your full potential (speaker video). (Available as a speaking engagement and/or consulting engagement).

_______________

Here's Some Additional Reading

'Do You Deal In Trust?'

'Why Do Boards Continue To Struggle With Strategy?'

'Repackaging The Board Observer'

'7 Steps To Create A Killer Board CV'

'On The Board of Public Opinion'

????????????????★?Join Our Mailing List??★

_______________