The boardroom is a space where important decisions regarding the direction of a company are made. It is also a place where the unseen aspects of power, influence, and human interaction play a significant role. These subtle interactions, often referred to as "boardroom politics," can affect the effectiveness of governance, strategic choices, and the overall performance of an organisation. Understanding these dynamics is crucial for directors who aim to ensure that their company is well-governed and able to achieve its goals.

This blog highlights some of the key elements of boardroom politics and provides practical suggestions on how to manage them effectively.

One of the significant drivers of boardroom politics is power and influence. Power in the boardroom is not always equally distributed. Some directors may hold more sway than others, either due to their experience, status within the company, or personal relationships with other members. This uneven distribution of power can sometimes lead to conflicts or the marginalisation of less influential voices.

Directors need to recognise when certain members may have too much control over discussions and decisions. One effective way to manage this is for the chairperson to ensure that all members of the board have the opportunity to contribute their thoughts and expertise. Directors should also be mindful of their own influence and avoid dominating discussions unnecessarily.

Another is alliances and coalitions in the boardroom. Just as in politics outside the boardroom, alliances are often formed within the board. Directors with similar interests or opinions may work together to push specific agendas or resist certain initiatives. While these alliances can sometimes lead to more efficient decision-making, they can also create division and prevent the board from reaching agreements that serve the best interest of the organisation.

It is vital for directors to be aware of these alliances and the impact they can have on board discussions. They should seek to build relationships with all members of the board, rather than limiting their interactions to a small group. With a culture of inclusiveness and collaboration, boards can ensure that decisions are made with the input of all members, rather than only a select few.

Also, conflicting interests can fan the ember of politics among board members.  Directors often come to the boardroom with varying interests. Some may be more focused on short-term financial results, while others may prioritise long-term sustainability. Additionally, directors who serve on multiple boards or represent specific shareholders may find themselves torn between different priorities. These conflicting interests can create tension within the boardroom and complicate decision-making.

To manage this, directors should always prioritise the interests of the company above personal or external considerations. Transparency is key here—directors should disclose any potential conflicts of interest and step aside from discussions where their objectivity may be compromised. A well-managed board will ensure that all interests are balanced fairly, without favouring one over the other.

In addition, communication styles can fuel boardroom politics. The way directors communicate can significantly affect boardroom dynamics. Some directors may be more assertive, while others may prefer to listen before offering their views. These differences in communication styles can sometimes lead to misunderstandings or even frustration among board members.

To avoid this, directors need to develop an awareness of the communication styles of their colleagues. Effective communication in the boardroom requires patience, active listening, and a willingness to adapt one’s style to suit the situation. This can help ensure that all voices are heard and that discussions remain productive and respectful.

Managing boardroom political dynamism requires tactful leadership. At the centre of this interplay is the chair of the board. The chairperson plays a critical role in managing the politics of the boardroom. A strong chairperson can ensure that all voices are heard, mediate disagreements, and keep discussions focused on the issues at hand. Conversely, a weak or biased chairperson can allow power struggles to dominate, leading to division and inefficiency.

For directors, it is essential to support the chairperson in their role and respect their leadership. If the chairperson is not effectively managing boardroom politics, directors should constructively raise concerns, offering suggestions on how to improve the board’s functioning.

There are several practical steps directors can take to manage the politics of the boardroom effectively.

 
Research and Advocacy CIoD

Politics in the boardroom is an unavoidable part of corporate governance. However, with the right approach, directors can manage these dynamics effectively and ensure that they do not hinder the board’s ability to make sound decisions. When they foster open communication, encourage participation from all members, and focus on the company’s objectives, directors can help create a productive and collaborative boardroom environment.

Research & Advocacy Department,
Chartered Institute of Directors (CIoD)
28, Olawale Edun Road, (Formerly Cameron Road), Ikoyi, Lagos.