Recently, La Trobe Business School’s Professors of Practice Michael Wildenauer and Catherine Ordway attended the 32nd National Conference of Contemporary Governance, where they conducted a workshop on ‘The Challenges of Representative Boards’.
The workshop, aimed at an audience of governance professionals including lawyers, corporate secretaries and board members, mostly consisted of attendees who currently worked on or with representative boards, keen to discuss challenges they faced, and strategies they could develop to confront those challenges.
“Most of the members attending came from a governance background with years of experience.” Michael Wildenauer says. “In that context, there isn’t anything new I would be able to teach them about how boards worked and what is required of them as directors. But what we could do was present them some really relevant research findings to spark a discussion, identify challenges in representative boards across sectors to see what they may have in common, and how these challenges could be overcome.”
“When you are a member of a representative board, elected or appointed” Michael explains, “it is important to remember that you are representing more than just your constituents. The board is responsible as a whole for every decision the governing body makes.” According to Michael, there are numerous factors that contribute to a well-functioning board, some structural and many cultural. One of the big issues is diversity, both on the board itself and within subcommittees.
Representative boards structurally create the opportunity for some diversity through providing a seat at the table for particular interests. While this structural diversity is important, as Michael explained, the workshop also explored the need: “to ensure that there is diversity within the various ‘factions’ on representative boards. For example, if all the employer appointed directors on a superannuation trustee board are 60 year old males and the union appointed directors are 35 year old women, the ‘us vs them’ dynamic can be very powerful. Furthermore, if boards have a token member from a diverse group, it’s possible that this token member will not have the confidence to speak up if they feel isolated. Or maybe they will speak, but they may not be heard.” For these reasons, Catherine Ordway points to the significant amount of research that supports that idea that a board that better represents the community in terms of gender and the range of education, culture, language, religious and life experiences can assist in: “more robust, creative and innovative decision-making”.
Other factors influencing the efficiency of a leadership board can be more straightforward, such as the size of the group and length of tenure. If there are too many directors, it creates room for passive members, who want to join a board for prestige purposes, but don’t necessarily play an active role in the board’s deliberations. Catherine’s experience with sports boards echoes this and she believes that: “the current scandals at the international level in tennis, football, the AFL and athletics relate back to self-interested board members who fail to put the organisation’s interests before their own”. Michael agrees: “A lot of the feedback we received from workshop attendees did relate to size and to long tenure. When attendees were asked to map out the challenges they encountered on sheets of butcher’s paper, the same topics resurfaced again and again. The group was very engaged in discussions around overcoming these challenges, and were very keen to share their own ideas and listen to those of others. That’s a good start.”