Guidance for Boards on Identifying and Addressing Problematic Director Behavior

How to use this tool: This tool can be used by board leaders to identify and address problematic director behavior.

Establishing and maintaining a positive board culture at times requires addressing problematic director behaviors. Problematic director behaviors come in a variety of forms, including these:

• Acting in an abrasive, abusive or disrespectful manner
• Monopolizing discussions
• Unduly interfering in management operations
• Overstepping one's authority
• Failing to respect and abide by company protocols and policies
• Leaking confidential information
• Failing to disclose a conflict and/or acting on a conflicted basis
• Taking any action that breaches a fiduciary duty or violates law or regulation

When faced with problematic director behaviors, boards have fairly limited options:

• Identification, Education & Coaching. In many instances, identifying the problematic behavior to the director will be sufficient. If the behavior reflects a lack of understanding about policies or obligations, education may be appropriate and helpful. For behavior reflective of a problematic personal style, offering coaching may also be appropriate. Individual director evaluations can help focus feedback about more generalized problematic behaviors.
• Reprimand. Board leaders should be prepared to address problematic board behavior when it is apparent. If a simple conversation is not sufficient, consult with counsel on how best to address. For a listed company, an actual reprimand for a breach of the code of conduct and ethics avoids public disclosure that the board waived the code.