Welcome to the August 2011 edition of The Director's Dilemma.

This newsletter provides case studies that have been written to help you to develop your judgement as a company director. The case studies are based upon real life; they focus on complex and challenging boardroom issues which can be resolved in a variety of ways. There is often no one 'correct' answer; just an answer that is more likely to work given the circumstances and personalities of the case.

Although these are real cases the names and some circumstances have been altered to ensure anonymity. Each potential solution to the case study has different pros and cons for the individuals and companies concerned. Every month this newsletter presents an issue and several responses.

Consider: Which response would you choose and why?

Carla is a director of a listed company. The board recently appointed a new director. Carla was not part of the selection committee. Prior to the appointment, the Chairman sought her advice because the nominating committee was uncertain; their preferred candidate was a woman whose skills were exactly what the company needed and had previously built her own company to national prominence before being bought out by a global competitor. Her 'non-compete' time had expired and she was keen to make a new career as a non-executive director.

Carla read the CV and was impressed. She could not find any fault with the candidate and, personally, was pleased that another woman might join the board. The Chairman commented to her that the candidate was 'very girlish'. He conceded that she had said and done nothing wrong; she was just very 'feminine'. Carla recommended he appoint the candidate and get used to more female modes of operation. That was six months ago.

Now Carla is regretting her advice. She finds the new director extremely irritating, and she suspects her co-directors feel the same way.

The new director flirts, giggles and talks in a high pitched breathless voice. She dresses in bright floral clothes and looks more like a lost shepherdess than a steward of shareholders' assets. There is nothing wrong with her thought processes; she is undoubtedly clever and perceptive. It is purely a style issue.

However, the CEO shudders visibly when he looks at her and the Chair has confided to Carla that he is not looking forward to having 'that woman' on stage with him at the AGM. He has asked Carla to have a word with her and see if she can exert an influence. Carla is unsure about making any such approach.

What should Carla do?

Dianne's Answer

Carla indicates the new woman is bright, intelligent and has good thought processes. She also appears to have great experience and I assume good references. As part of any recruitment process, the Chairman must have reference checked her and any standout issues would have been highlighted. So it comes down to her personal style versus the company's personal style. In addition she must have interviewed at least twice so the Chair and CEO would have seen how she dressed, which would be a good indicator of what she sees as 'corporate dress'.

I have occasionally been guilty of disliking someone on sight (often regretted) but I have some difficulty understanding why an individual within a Company is not allowed to be an individual. On the other hand, I understand that cultural fit is very important when making a senior appointment.

My advice to Carla is not to have a word to her new female peer. Even if she smiled throughout the delivery of advice and her wardrobe, I can tell you she will not appreciate it and Carla will have lost an ally forever. Instead, Carla should have a word with the CEO and ask him if he finds anything valuable about the new Director including her contribution and work ethic. If the answer is no, then he should sit down with the new Director and tell her it's not working. Then hopefully she can find a new role where she will fit in and be appreciated for what she brings to the table.

Dianne Strauss is an Executive Consultant at Vital Health Recruitment, Australia, and a former Director, Interim Management at Veredus UK.

Julie's Answer

Carla is a successful director; if her instinct tells her to avoid this conversation she should trust her own judgement. She can add more value advising her Chairman than getting involved.

Clever people modify their behaviour at interviews unless they are very unwilling to change it. Warning signs at interview will inevitably turn into friction later on.

There has been no proper induction or attempt to establish dress and behaviour codes at the start. These should now be discussed for the whole board as part of the review process. Fast action to review before the AGM may be required.

Many corporate codes of conduct have statements about 'dressing in a manner that inspires confidence in your professionalism'. Without condemning anyone to 'death by blue pinstripe', the board should discuss their leadership modelling role in the context of what this company needs. Aim to consider questions such as 'would we succeed if our young managers dressed as we do?' In an entrepreneurial company the founder/leader sets the tone; the new director will recognise that as a board member she has an impact and must take responsibility for her dress code.

Flirting and giggling could be stress reactions or responses to attempted avuncular/paternal behaviour. This is all about power and the male directors need to consider their own behaviour as well as the reaction it generates. Remove the stimulus and the response will subside.

Has Carla ever felt slighted or put down? Can she tell her Chairman about a time when she felt that way? Carla's response to these put downs may be serious and businesslike; her new colleague responds differently. Carla could ask her colleague how she feels the men on the board are treating her. If there is a problem, she should listen and feed the information back to the male directors.

Directors need to form a collegiate team; telling a successful woman how to behave, speak or dress will not help that process: Focusing on building an appropriate board culture will.

Julie Garland McLellan is a specialist board consultant and practising non-executive director based in Sydney, Australia.

Frances' Answer

I recently had a similar problem on a board. In this case it was with the CEO. A woman of talent that we needed, but "gappy". The tension between her and the Chair meant they were unable to communicate with each other.

I was given the job by the 'boys' to talk with her and attempt to resolve the issues. I accepted as I had huge respect for her skills and felt retaining her services were critical at that moment of the business's life.

I decided to use traditional woman's methodology, and took her out for a fancy afternoon tea - cucumber sandwiches and all!

In a different environment we were able to discuss the issues in a more relaxed and supportive manner. I could discuss the problem areas without it being too threatening (critiquing behaviour is always hurtful as ego is involved) and we came up with some solutions. One was identifying her need for a high quality mentor - male - to give her alternative strategies for getting her message across. More confidence meant that she didn't fall into the girly mode - in this case leaving the room to cry. Another was to ensure she went on a top quality leadership course to give her more skills and courage in her leadership role.

Often the shrill girly laughter is nerves. Dress code is important, and that can be brought up obliquely when discussing leadership for women. Just because we have chosen to move into a male world doesn't mean that we should lose our old skills nurtured over many generations. A cup of tea can do wonders!

Frances Denz is a trustee of Trustee at Tauranga Energy Consumer Trust and a former President of Western Bay of Plenty Grey Power. She is based in New Zealand.

Bill's Answer

I am astounded.

Let me requote the preferred candidate was 'a woman whose skills were exactly what the company needed and had previously built her own company to national prominence before being bought out by a global competitor'. It would seem to me that regardless of style, this new board member could probably buy and sell most of the existing board.

Whether the Chairman cringes at her manner is speech is largely his problem and the problem with many boards today; they are out of touch with their customer base.

Diversity of boards is not about doing the right thing for the sake of it but having representation that gives an organisation not just the right skills for governance but also the right strategic skills. The concept that middle aged men in blue pinstriped suits are the only ones capable of stewardship of the shareholders assets ignores the very fact that the shareholders assets are best preserved by making sure that any organisation remains relevant in the eyes of its customers. In this ever-changing world, that requires a diversity of views.

Coming back to the original question it is not appropriate for the Chairman to ask Carla to 'have a word.' This is not about delegation but about perception and pre-conceptions. It is his judgement and therefore his issue and he should be prepared to discuss those pre-conceptions in a rational manner with his new director.

Bill Forrester is a co-founder of Travability and a franchisee at Harvey World Travel in Melbourne, Australia. He is a former senior executive at Melbourne Water.

Disclaimer

The opinions expressed above are general in nature and are designed to help you to develop your judgement as a director. They are not a definitive legal ruling. Names and some circumstances in the case study have been changed to ensure anonymity. Contributors to this newsletter comment in the context of their own jurisdiction; readers should check their local laws and regulations as they may be very different.

What's New

ABN Webinar - I really enjoyed presenting this webinar for the Australian Business Women's Network: 'Would you, Could you, Should you join a board?' is a practical look at some of the key considerations for women (and men) targeting a board career.

Global eBook Awards - I was thrilled to be invited to judge the business category of the Global eBook Awards. See next month's newsletter for more details of the shortlisted finalists and my hopes for the eventual winners.

Book reviews - Finding books that meet the needs of directors and aspiring directors is no easy task. Many glossy publications have little substance. Here is my review of The Sixth Wave; How to succeed in a resource-limited world by James Bradfield Moody and Bianca Nogrady.

Success tips for board presentations - My new book "Presenting to Boards; practical skills for corporate presentations" launched in March. You can get a copy through Amazon.com or from independent book retailers. Here is a review by John O'Grady

Where's Julie? - A few readers manage to catch up with me on my travels and it is such a pleasure to meet them that I now share my travel plans each month.

Please call or email me if you would like to schedule a meeting or find out more about attending one of these events.

This newsletter - If you have any ideas for improving the newsletter please email me your thoughts. If you are reading a forwarded copy please visit my website and sign up for your own subscription.

Suggestions for dilemmas - Thank you to all the readers who have suggested dilemmas. I will answer them all eventually.

Farewell until the next issue (due 1 September 2011).

Enjoy governing your corporations; we are privileged to do what we do!

Best regards
Julie

www.mclellan.com.au | PO Box 97 Killara NSW 2071
email julie@mclellan.com.au | phone +61 2 9499 8700 | mobile +61 411 262 470 | fax +61 2 9499 8711