I’ve listened to the proponents of the “diversity factor” refute and deny the argument that diversity by its very nature brings another dimension of tension to the board table. Surely diversity’s prime objective is the presentation of different thought processes and concepts to move debate and discussion outside of what might be considered normal.
The natural fallout from such agendas is to introduce tension around a board table and this can either be a positive element in a board debate and discussion or it can be disruptive. The Chairman’s leadership role within the board’s governance structures is to harness the output of these tensions and make sure they are positively directed towards organisational success.
However surely a group of directors who are in harmony with each other can more positively manage diversity of thought and action while capturing the positive elements of the concepts being debated than a board where tensions have not been managed well and have created distrust and division within the directors group?
Particularly at board level relationships are built on trust and respect without which decision making can and often does become more judgemental than objective. Now add in the new element of the diversity syndrome and if there’s no compatibility and trust leading to harmony around the board table positive decision making becomes just that more difficult.
Difficult relationships and lack of trust can lead to major fall outs which can affect corporation’s public images and market place presence. Look at Jill Ambramson’s firing from the New York Times or the ousting of Men’s Warehouse founder and spokesman George Zimmer from his role as Chairman. The media had a field day with these corporate fall outs which without doubt had a detrimental effect on their performance and share value.
So in this brave new world of shareholder activism and gender being promoted to create diversity around the board table it’s critically important that new director selection include an element of compatibility with existing board members and major shareholders. Compatibility is certainly far from being the driving force as a major selection criteria but never the less it has a place and is an important factor which needs to be recognised as a integral part of the selection process.
Harmony of thought and action leads to trust and acceptance of each individual’s values which in turn can add value to board decision making and thus success in driving increased shareholder wealth.
"Difficult relationships and lack of trust can lead to major fall outs which can affect corporation’s public images and market place presence."