Boardrooms have been the subject of an unusually large number of headlines so far this year. Particularly in the UK, where P&O has fired the crew of the 786 with the goal of replacing them with a new third-party crew. P&O later admitted breaking the law, with CEO Peter Hepplethwaite receiving widespread condemnation as the country turned against them and the story became global scandal A shining example of bad decision-making at the highest levels.
It’s clear that while transparency and exemplary ESG credentials have become an integral part of the external reputation and internal performance of companies of all sizes, many boards of directors are still adjusting to this shift in expectations.
To find out more about getting ESG to serve on boards, I spoke to Monica Lagercrantz, founder of BoardClic, which is a SaaS B2B platform for advanced assessments of boards, CEOs, and management teams – providing standardized metrics and qualitative insights into board performance and transparency. With over 25 years of international experience searching for executives in international markets, Monica has particular experience in hiring for Board of Directors, creating partnerships with companies with active major shareholders, and is a well-known private equity advisor.
Gary Drenick: In recent months, we’ve seen several high-profile cases of boards getting wrong – why do you think this has become a trend?
Monica Lagerrantz: Council work is a very complex activity and it is not difficult to get it wrong. Especially since there’s a lot of spotlight on the board these days – the “G” in ESG is a key component of this, with many unbiased stakeholders involved. Getting it right often comes down to two simple, but crucial, components of any well-functioning conference room: self-reflection and feedback. Once you are appointed to a board of directors or become CEO, feedback often stops – when it should increase.
If the people around you are either unwilling or unable to provide honest feedback, you will quickly find yourself without the challenging perspectives needed to ensure that strong and thoughtful decisions are made at the highest levels in any organization.
Drenick: So, in your experience, why do comments often stop once someone becomes a board member or CEO?
Lagerrantz: It is often wrongly assumed that humanity and empathy are the enemies of profit when in reality the opposite is true. When you’re surrounded by like-minded people at the board level, consistently generic feedback can quickly invalidate the categorical thinking required of decision makers. Sluggish groupthink, with minimal accountability for subsequent actions, inevitably leads to slower growth and worse outcomes across the broader company — on all levels.
The day-to-day management of any organization is undoubtedly important, but this should not come at the cost of neglecting the broader fundamentals involved in defining roles, planning, culture and performance. All are backed by necessary and effective processes of feedback and effective communication.
This is where my company, Boardclic, comes in. Throughout my career searching for international executives, I’ve seen for myself how hard it is to get one plus one to become two when you have a group of highly qualified people. This isn’t clear to everyone, but the impact of bad feedback processes on the performance of exceptional individuals – and the need for boardrooms to improve Take control of the ESG agenda – It was clear to see.
The breakup was often annoying, but resolvable in my mind – and centered around embracing data. By combining analytics with enhanced feedback processes, Boardclic gives boards this rare opportunity to gain qualified feedback to improve performance and ensure they make key decisions right — focusing on a key component of our work. Implementation of instant feedback.
Drenick: What would you say to decision makers who may find themselves paralyzed by fear of making the wrong decision?
Lagerrantz: You can never get too many comments, only bad ones. Surrounding yourself with good people is only part of the equation; The other is to make sure they are people who are willing to challenge you and disagree with you at critical junctures.
Poor decision-making, especially when this becomes a pattern, cannot be underestimated as a major driver of the collapse of any company. At the highest levels, this often comes with financial and external reputational damage – and it’s often very difficult to look back once it has occurred.
We all tend to make the wrong decisions sometimes. Nobody wants to get things wrong – but fear the paralysis could be worse. In the midst of The great resignation, current and potential employees will be looking for a clear direction from above. By being content to make major decisions that culminate in clear dialogue, mistakes can be learned and outcomes continually improved.
Drenick: Do CEOs have a lot of influence today? How do those below them navigate, and even change, this?
Lagerrantz: Naturally, in some organisations, the structure and dynamics are such that there is an imbalance of power. The CEO will always have a great deal of influence — but the feedback is what ensures that employees don’t feel that this level of power is undue or, crucially, unchecked.
According to the post Prosperity Insights & Analytics Survey, workplace happiness (happy and completely happy) among 18-34 is only 42.1%, 48% among 35-54, and 41.3% among 55+ demographic. It’s clear that a lot of employees aren’t as happy as their employers would like – a worrying sentiment that recurs across age demographics as well.
This is why feedback at all levels – allowing employees to feel heard and understood – should be a priority for any company; Ensuring that processes are in place to build a consensus dynamic between the CEO and their employees plays a key role in improving the current feel in the workplace.
Drenick: For those who may not be receptive to the idea of a diverse group of board members from different backgrounds, can you explain why this is important for feedback?
Lagerrantz: It all comes down to judgment. G puts well and truly in the ESG. According to the post Prosperity Insights & AnalyticsOnly 19.9% of respondents said that ESG was not important at all, or even very important to them when buying shares. As more people become aware of ESG, ensuring that boardrooms are able to reflect this and drive accountability, increased sentiment across diverse client bases is vital to continued success.
Here, ensuring that governance processes are influenced by diverse-minded board members is key. Not only for the expansion of views, but also for the dialogue that ensues; Through a wide range of thought processes, internal discussions will see an improvement in quality, leading to more informed and informed decisions.
Drenick: Thank you very much Monica for sharing your wonderful vision of the boardroom with me today.