Boardroom dynamics, as the name suggests, are an intricate web of behaviors that interact and influence one another. They are, in increasing numbers, being recognised as a key component of successful governance. Regulators and behavioural scientists and governance specialists as well as boards themselves are increasingly realizing that the soft aspects of the boardroom’s behaviour as opposed to the rigidity of structures and boxes to be ticked, make an important difference to the effectiveness of a board.
The board’s decision-making process could be weakened when board members are encouraged to favour their own personal preferences over the interests of the entire company and its stakeholders. Spring loading is a concern that must be addressed by encouraging transparency, accountability, and an open and transparent culture. Open communication channels, solid governance structures, diversity and continual education and training of board members are proven strategies to mitigate spring loading.
It is also important for boards to have robust debates and to embrace virtual data room providers constructive conflict, especially when addressing controversial issues or making decisions. This can help to avoid the phenomenon of groupthink, in which the board fails to consider all alternatives and ultimately makes a decision that is suboptimal for the company. Boards can also rely on their own independent third-party advisors as well as a corporate secretary to create structure, challenge assumptions, and even play the Devil’s Advocate.