(Originally appeared in the November 6, 2018 'Across the Board' publication, a Board Director, Board Advisor, C-Level, and Business Newsletter reaching 25,000+ exceptional business leaders in over 65 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.'
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?