A board, Pocalyko suggests, can be functional with bad directors, but a board cannot be great if it tolerates them. He then goes beyond the collective characteristics described above to identify 14 of the most prominent kinds of bad directors. Somewhat apologetically he acknowledges that they are cartoonish when described (or pictured), but that does not mean they are not very real and not commonly found.
The following is a summary, and the full descriptions in the original article are worth reading if you are genuinely into self-awareness.
An exceptional, narrowband expert, contemptuous of anyone who cannot match their clear intellectual dominance. These directors expect deference. They have the potential to make their field understandable and relatable to other members of the board but don’t have the ability or the desire. They struggle to transcend their very tightly compartmentalised roles.
Represents only one point of view, one specific group of shareholders or one narrow perspective on the corporation’s alternative future. Representatives tend to have a distorted interpretation of their fiduciary duty. For example, that the duty of loyalty means loyalty to one influence of overriding importance, not to the corporation as a whole.
Has stayed too long and is too emotionally invested in their directorship to be effective any longer. Likely hanging onto their board seat as the last vestige of professional relevance. Their contribution is usually to raise issues which are largely insignificant.
Expresses authority well beyond their actual level of competence. Speaks very authoritatively and likes jargon. Described by Pocalyko as probably the most insidious of the bad director forms because other directors and executives tend to defer to them.
Effectively the second vote for another director who has a particularly strong personality. A follower not a leader and, beyond support for their alpha director, rarely contributes to board dialogue.
The financial stumbler
Less than financially literate, lost in discussions of technical finance matters and has not mastered board-level accounting oversight. May even have a distaste for the numbers, expressed in humorous self-deprecation.
Highly self-assured and highly self-regarding, completely comfortable while blatantly overextended. Effective at winging it, based on long-practised shallow and wide preparation. Known for active, tough sounding feedback to executives until matters touch upon technical issues.
‘Asks the tough questions’ (self-styled) but never likes the tough answers. Board and committee meetings become mired down by their enquiries. Their questions are mostly inchoate, but sometimes unveil an agenda.
This director is intent upon interjecting partisan politics into the boardroom. Their oversight of the corporate enterprise must be brought into conformity with their perceived political reality. Naturally agenda-driven.
The consensus denier
Understands group dynamics and possesses formidable people skills. Their principal weapon is the denial of consensus until their position is accommodated. They must always be pleased no matter how inconsequential the issue. Masters at gleaning data from mid-level executives and selectively applying that data to deny issue resolution.
Conflates aggression with toughness. Volatile and makes ready use of threats and intimidation. Natural board disagreements are seen as a personal affront to their power. Denigrate efforts to expand board consideration to matters beyond short-term financial ones. Can do lasting damage by making it difficult for the board and executive team to attract top talent.
Constantly tells war stories, unrelentingly and to distraction. This kind of director is generally well-meaning but clueless and repeatedly demonstrates their inconsequence.
The lawyer reliant
These directors generally take two forms. The first kind always defers to legal counsel, is risk-averse in the extreme, and overly fearful of litigation. The second is the opposite, constantly demanding that the lawyers find a way to accomplish whatever dubious action they may desire.
Big names with major cachet. They like being directors despite their ephemeral grasp of even the most basic board responsibilities. Easily defer to authority.
In conclusion, Pocalyko suggests the following components of an antidote to bad directors:
- a structured program of director onboarding, continuing education, and shared decision-making
- active communication, conflict resolution, and currency in technology, finance, and accounting across the board
- having boards embrace the best concepts of moral strength, applied integrity, and ethical leadership while seeking profits and social advance.
As he concludes, bad directors will continue to exist, but we do not have to be one of them.2
- Michael Pocalyko. ‘A Field Guide to Bad Directors: How to identify them. How not to become one’. NACD Directorship, July/August, 2018.
- A web search for the full article will also link to a supporting article in the same issue. A worthwhile complement to Pocalyko’s piece, under the heading ‘Good Directors on Bad Directors’ it is a series of interviews with experienced directors.