When a Board Member Cheats, Everyone Loses

I was watching the cricket the other night as Australia sadly lost *another* match. The [male] Australian cricket team just aren’t the same as they used to be. When I was growing up, they were on top of the world. And we, as a country, were lifted along with them. We were unstoppable. Needless to say, watching this game the other night, I felt disappointed and frustrated. I said to my husband:

“We’ve all lost because a couple of people thought it was ok to cheat.”

It sparked a train of thought: Is it not the same in the boardroom?

 

As we have seen, a few people within the finance industry – including senior leaders and board members – thought it was OK to cheat, and we’ve all lost out to some degree because of it.

Board members can cheat in the boardroom in a number of ways:

  • They cheat by not coming to meetings prepared.
  • They cheat by allowing personal interests get in the way of decisions.
  • They cheat by letting their ego control their behaviours.
  • They cheat by not helping out in committees or with fundraising efforts.
  • They cheat by hiding or withholding critical information.
  • They cheat by failing to hold people truly accountable.
  • They cheat by “playing within the rules”, even when it’s highly unethical to do so.
  • They cheat by not maintaining confidentiality.

Boardroom behaviours set a tone across the organisation. What you allow people to get away with (and not get away with), and the decisions you make (and don’t make) in the boardroom, influence how employees behave throughout the organisation.

The board is not unseeable and its impact is felt throughout the organisation. Actions in the boardroom send a clear signal to everyone what’s OK and what’s not OK to do.

Furthermore, businesses don’t operate in isolation. Much like a precise, fragile ecosystem, everything is connected. Small decisions – like to encourage someone to buy an unnecessary product, or to scruff up a ball – have large, wide-reaching consequences.

It’s like the butterfly effect: a butterfly flaps its wings in New Mexico and causes a hurricane in China.

As board members, we all need to realise that cheating – of any kind, and of any degree – has the power to impact the whole community. When a board member cheats, everybody loses.

We wield great power in the boardroom; it’s why people want to get in there, and many never want to leave. With that comes a great deal of responsibility. Exercise it wisely and consider the compounding effects that your actions and decisions have.

What are your thoughts? Share them in the comments below.


Subscribe to Receive Articles, Resources, and Tools to Support Your Board Career, and join our free five-day board resume writing e-workshop.

* indicates required



November 29, 2018

4 responses on "When a Board Member Cheats, Everyone Loses"

  1. There are a number of fundamental flaws, apart from the obvious, that severely distort a board’s ability to provide uncompromising advice and guidance:
    1. The CEO who may or may not hold significant shareholding, populates the board with his/her mates. He/she encourages a generous director remuneration structure so that directors will not rock the boat thus maintaining their positions and financial benefit. This inhibits a board’s ability to fulfil their obligations.
    2. An ineffectual Chairman: if the Chairman is not able or prepared to appropriately oversight the CEO then they shouldn’t hold the position. The converse also applies; when the Chairman is a bully and doesn’t consider objectively the suggestions and recommendations of other directors.
    3. The board must provide, and be seen to provide, the moral and ethical standard that the organisation MUST follow. Any breach of this standard must be, and seen to be upheld – regardless of the transgressor’s position.
    4. Nearly every organisation with shareholders that I have advised, have made erroneous assumptions about their shareholders and actively work to suppress shareholder “input”. A doctoral thesis supports this contention.
    JJJ

    • Thanks for your comments Dr Jacoby. Board and governance structures are no doubt imperfect and are at risk of the exploitations that you have mentioned (as well as many others I imagine). It’s up to directors to recognise these inherent flaws and work to overcome them (or minimise their impacts at the very least).

  2. good examples … it can be pretty easy to fall into cheating, and sometimes its not obvious.

    thanks for your content Lisa.

Leave a Message

Your email address will not be published. Required fields are marked *

What is Get on Board?

Get on Board delivers education and development courses that are open to individuals from all professional backgrounds and all types of industries (public, private, NFP, sporting organisations and clubs, etc.). Get on Board focuses on aspiring directors – those people looking to join a board in the near future – and on new directors – those who are currently in their first to fifth year of sitting on a board. Everything that we do is geared towards developing the corporate governance skills, and the business, strategic and financial acumen of new and aspiring company directors.

Subscribe

* indicates required

Social

Send Us a Message

top
© Get on Board Australia Template Design © VibeThemes. All rights reserved.