The 6 Signs of Dysfunctional Company Boards

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I have written in the past few weeks about the problem with board meetings and the problem with sales meetings. It was suggested to me that it might be helpful if I explained what particular issues with a dysfunctional company board and how a well run company board would operate. In this article I intend to concentrate on dysfunctional boards or boards in crisis. 

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So lets remind ourselves what issues should be addressed at board meetings? They’re the meeting that set the direction for the company, confirm policy, and directs the business response to unforeseen events either external like for example a significant change in market conditions or the arrival of a new or stronger competitor. The unforeseen events maybe internal like the loss of key staff or a major issue with sales or production. To get the best out of these meetings they should be held regularly and it should involve a review of the company’s performance.  

So, if that's what a Board meeting should cover what do we typically see in a dysfunctional or crisis board.

Number 1 is not understanding the importance of a board meeting. As individuals and owners we tend work and think at an operational or detail level and it takes some effort and often some training to start to look at strategic and policy issues at a high level. Because operational issues tend to be more immediate and therefore urgent they get in the way of longer term but no less important considerations. Boards meetings are vital to the long term health of a business and are a necessary condition if you want a business to be successful over the long run. I have seen many situations where Board Meetings have gradually been dropped because well meaning owners and managers confuse them with operations or management meeting. Often its only when a crisis hits the business that the management team understand its importance and by then it can be too late.

Number 2 is where day-to-day operations dominate meetings. This is the most common situation and is a result of the first symptom.   Typically the meeting will have no agenda and the participants will have made little or no preparation, consequently what gets discussed is what is on peoples minds at the time (management issues).

Number 3 is not having external advisers. In order to understand and address strategic issues, and probably any issue, it is beneficial to get external advice from people who are not intimately involved in the business. These people can be Non Executive Directors or external advisers.  This separation gives them the ability to make key insights  about the business and its relative performance that would not be possible from internal managers and directors, who often "cant sees the woods for the trees".


Number 4 is hearsay management. This is a situation where the business owner/ CEO makes decisions based on their gut instinct or impulse and without proper evidence. In these situations boards are often seen as a hindrance because board meetings are a forum where   members can question and review key decisions. This type of situation is often coupled with number 5 where the CEO/MD has a low opinion of the management team and doesn't see great value in their input or they don't want to be challenged. I have found this later situation common in family run businesses where the control is kept within the family irrespective of capability and the unwanted scrutiny of a board meeting is something to avoid.


Number 6 the  festering issue/disruptive director. These two often go hand in hand and the disruptive director is often a result of a long running issue that has been ignored, where he or they consider that a poor or no decision has been taken on a subject of great importance to them and despite numerous attempts the problem is avoided leaving a disgruntled board member. The result is that they will go to great lengths to try to raise the issue whilst everyone else will do their best to avoid it, as a result issue and those connected issues are not properly discussed and frequently board meetings are delayed or cancelled as part of the avoidance process. This situation is especially common where you have strong characters who will be persistent in the cause to the point of absurdity and in the long run is very damaging to a team. Often a climate of distrust will develop and worsen team relations the longer the issue is not openly discussed and some form of conclusion reached.


Whilst there are many issues surrounding board meetings don't let this list put you off, many companies have a well functioning board. My next blog post will look at what a properly functioning board look like. I would also like to take the opportunity to give my thanks to Ivor Middleton who assisted in the preparation of this article.

Exigent Consulting provides specialist services for High Growth Business , Business Turnaround, and Mentoring to the Small and Medium Business. We help Business Owners improve the profit performance of their business. 

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The Problem with Sales Meetings......

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Some while ago I wrote a short piece on the problem with board meetings, following work with recent clients it seems that there is also problems with sales meetings. Let me recount recent experiences to illustrate what I mean. The meeting starts well and their is an Agenda of sorts. What happens next is that a member of the team is asked to describe what they have done for the preceding month. There follows a long rambling commentary about how busy they have been and what opportunities their are and a volley of reasons why they haven't sold us much as they thought. This monologue took about 20 minutes.

Image by Nils Geylen via Flickr

The next member of the sales team them repeated the process with one objective in mind; to spend more time talking that the person before him. Repeat that four times and your have a very long sales meeting. In the worst case it was 6 hours, yes, 6 hours I kid you not. Worst still, at least from my point of view, was that very little valuable information was provided either to management or from management. It was also clear that the sales team saw the meeting as largely a waste of time, and at 6 hours who can blame them. Having said that the sales team were also part of the problem.

Sales people by definition quite hard to manage. This is because they are trained to handle objections (management questioning) and get around obstacles (management questions and reporting). Put another way without a strong focus its difficult to put sales people on the spot. Except of course when they've just made a big sale and then of course they will remind you at every turn. We shouldn't criticise but simply understand that this is the nature of sales people and we just have to learn to manage it. 

So the problem with sales meeting is that they are run by managers who are not trained as sales managers and who have to deal with trained sales people. In many cases it's just an unfair fight. The result is often that sales people don't treat the meeting with the respect it deserves and take advantage of their managers' lack of experience. This is not universal but in my experience it is a common situation.

So if you fall in this category as a manager/owner what can you do about it?

It all starts with asking the right questions. Sales meeting reporting need to be precise and unequivocal. By that I mean getting information from your sales people that is binary either a yes or no. So to keep control of a sales meeting its best to get your sales people to report on items such as business won in the month business lost in the month and business expected to close in the next month (or weekly depending on your sales cycle). 

Getting sales people to report on numbers makes it easier for you to understand what is really going on. It also leaves much less wriggle room about what has or hasn't been achieved. As a manager/owner you will have a target for monthly sales you need to know  are they being achieved and if so is thee significant over or under achievement. Depending on the answer, which by the way can be identified from the reports, you will know what kinds of questions to ask. It also means you can get through the meeting more rapidly because it becomes a Q&A session rather than a series on monologues. Further it will be easier to identify actions to take place before the next meeting thereby providing focus for future meetings and making it easier for you to stay in control.

You can get a sample of reporting formats I've been discussing by clicking here and downloading them.

Exigent Consulting provides specialist services for High Growth Business , Business Turnaround, and Mentoring to the Small and Medium Business. We help Business Owners improve the profit performance of their business. 

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The problem with Board Meetings....

Image by Getty Images via @daylife

We seem to be very bad at prioritising meetings within organisations; we seem to be driven by knee jerk reaction rather than common sense, although I wonder if it should be more accurately described as uncommon sense. This is especially true of the SME sector, where board meetings seem to be the exception rather than the rule. Some of this is due to owner managers having little or no understanding of what as board meeting should cover or how to manage a meeting of this type. In my opinion a board meeting is the most important internal meeting a company can have. It is probably the only setting where strategy is discussed and policies made. It is not a place where detailed operational decisions are made, but in my experience this is all often what is discussed. This leads to confusion in the minds of participants and doubts about its importance/relevance and results in questions like don’t we cover this in the operations / marketing/ finance meeting?

So what are board meetings about? They’re the meeting that set the direction for the company, confirm policy, and directs the business response to unforeseen events either external like for example a significant change in market conditions or the arrival of a new or stronger competitor. The unforeseen events maybe internal like the loss of key staff or a major issue with sales or production. To get the best out of these meetings they should be held regularly and it should involve a review of the company’s performance.

So the problem with board meetings is simply that they’re not understood and not taken seriously so they can’t deliver the benefits to the business they should.

Exigent Consulting specialises in providing Business Turnaround, Sales, Marketing and Mentoring to the Small and Medium Business. We help Business Owners improve the profit performance of their business.

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