‘What happens when the praise has run dry and critical feedback must be delivered?’

Dr Roger Barker, Director of Policy and Governance for the Institute of Directors, sets out how board directors can benefit from critical feedback, including from external stakeholders…

Praise is more effective than criticism, according to Dale Carnegie’s seminal self-help book ‘How To Win Friends And Influence People’, first published in 1936.

Carnegie was certainly onto something and his observation should resonate with company directors to this day.

But, what happens when the praise has run dry and critical feedback must be delivered?

It is much easier to deliver tough messages to colleagues in the workplace if the board and senior management has already built trust and good relationships – any criticism is then far more likely to be heard and embraced.

At the Institute of Directors, we believe that regular board evaluation is the best way to identify and address issues quickly and professionally.

Board evaluations are now more commonplace and involve a wider range of views

Historically, directors did not see themselves as part of the evaluation and review process. Directors were accountable to shareholders … and only shareholders. The thought of an external party or somebody more junior in the company hierarchy offering a critical view on their performance was unthinkable, and unheard of.

That has changed over the last ten or twenty years and board evaluations are now commonplace. The UK Corporate Governance Code advises all premium listed firms to conduct an annual internal evaluation. It also advises an external review of the board, done by outside consultants, every three years.

The internal review is run by the company secretary, who sends out questionnaires to directors. The chair would then provide any critical feedback that may arise as part of a broad discussion with the board about performance.

At this stage, it is wise to be non-confrontational and collegiate, sticking to some of the key findings from the review.

However, there will inevitably be instances where the chair has to address a director individually – this would be done in private to avoid any public embarrassment, and the chair would outline the specific reasons why the ‘chat’ was necessary.

Fortunately, cases of rude, disruptive or overly belligerent board directors are rare. It is more likely to involve directors who consistently miss meetings, are not properly prepared for meetings, don’t read their briefing papers and who are clearly disinterested in the work of the board.

Any critical feedback should then be delivered in a professional manner, without getting personal. If done in the right way, directors should view this in the spirit in which the feedback is intended and learn to become more effective board directors.

Feedback to the chair should be presented as an opportunity for them to grow

A more tricky situation for company directors to deal with is where the board chair is the problem.

In that case, it is up to the senior independent director (SID) to take soundings from the rest of the board about the performance of the chair.

The SID can run this as part of the annual internal check up, or they can call in independent external consultants to conduct a board review.

Feedback from the review should be handled professionally, focus on specific areas for improvement and present the process, not as a negative, but as an opportunity for the chair to learn and grow.

It is an approach that I’m sure Carnegie would approve of.