Curiosity in the Boardroom

By Lawrence X. Taylor

06/06/2021

Board Culture Board Dynamics Private Company Governance Online Article

The Sounds of Silence

We’ve all been there. You’re sitting in a conference room. Someone is delivering a PowerPoint presentation. It’s a beautiful presentation. Colorful charts and graphs. Bullet points and highlights. It looks important and impressive, and the presenter is eloquent. Then, the presenter says something that you don’t quite understand or needs additional clarity. You look around the room, and you can tell from the expressions on a few faces that you’re not the only one feeling this way.

And yet, there is silence. Deafening silence. You begin to hear faint music in your head, “Hello darkness, my old friend. I’ve come to talk to you again…within the sounds of silence.” You shake Simon and Garfunkel from your head and realize not only is there silence, but no one is asking a question. Worse yet, just about everyone is nodding in agreement. You know something seems not quite right, but you find yourself silent and nodding along because you don’t want to be that person. You know, the person that interrupts and asks a question because they don’t understand something or needs more clarification. We let our ego get in the way. We don’t want to ask a question because by doing so, others may think we are unnecessarily prolonging the meeting, or worse yet, we risk that someone in the room will think we aren’t smart.

The Curiosity Story

I’m going to tell you a story about a kid. Both of the kid’s parents were schoolteachers. The kid thought his parents were weird because they were always asking him questions. Not only did they ask him questions, but they also made him ask questions. They instilled in him a very weird sense of curiosity and wonder. He could recite his parent’s mantra while sleeping. “If you don’t understand something, you better raise your hand and ask a question.” The kid complained to his parents that sometimes in class, the other kids would poke fun and say he wasn’t smart because he was always asking questions if he didn’t understand something. His parents told him, “You can only be so smart. At some point, you will reach the end of your smartness. But, you can always ask questions. Curiosity is better than being smart.”

Eventually, he got comfortable with asking questions and didn’t care if people thought he wasn’t smart. He thought understanding the issue was better than not knowing and certainly better than what others thought of him. That kid was me. Over the course of my career, I have become that person. The person who will raise his hand in a meeting because he doesn’t understand something. I continue to do it, and I do it without shame.

The Board Member Imperative

I worked in the byzantine world of financial restructuring, including being on the board of two companies in Chapter 11. When my firm was engaged to assess a situation and provide strategic alternatives, I was always amazed at the questions that never got asked, or asked too late, in the board room or the executive meetings as the company traveled down the path to financial distress. Questions that, had they been asked, could likely have charted a new path for the company that did not involve having difficult conversations with creditors or answering questions before a federal bankruptcy judge.  

Questions like:

“Our debt is due in two years. How early is too early to initiate conversations with our lender about refinancing, covenants, and terms?" 

“Is this new project really a good idea? Does it further our strategic and financial objectives? What are the hidden costs, especially non-financial, that could be a drain on resources that we haven’t contemplated?”

“Are our critical suppliers or customers under stress? Have we game-planned the loss of a critical supplier or customer?”

“Are our cash reserves sufficient to sustain through a downturn? If necessary, what assets can we monetize, and how much runway would that provide?”

As board members, we have a mandate to ask questions in the board room. We don’t have the luxury of being silent. It’s imperative for the well-being of the company and helps to facilitate good governance. As board members, we need to ask questions, especially when something doesn’t seem quite right or we lack clarity on an issue. It can literally be the difference between a successful outcome or a bad outcome. 

The Private Company Boardroom

Often in private or family-owned businesses, difficult questions don’t get asked for a variety of reasons, many of which revolve around family or personal issues. Some of these issues can be very sensitive and can also be years in the making. That is all the more reason for asking relevant questions. It’s particularly critical for board members to do this when some of these areas fall outside their individual expertise

The questions should be probing and thoughtful and insightful. Never confrontational or condescending. The questions should foster healthy discussion and debate. Sometimes the questions will cause disagreements. But that’s ok. Deep curiosity creates purposeful dialogue and comprehensive understanding, which ultimately leads to informed decisions that position the company for success.

Don’t worry about being perceived as not smart or prolonging a discussion. Be curious. Because curiosity is better than being smart.