Polarization in the Boardroom: Strategies for Managing Divergent Views

NACD Northern California held a timely virtual event on the topic of "Polarization in the Boardroom: Strategies for Managing Divergent Views" to engage in a critical conversation on the psychology behind polarizing belief systems and the associated risks (and potential opportunities) to corporations. The event delved into the implications for boards navigating differing views, particularly around politically charged topics such as climate change. We explored how to recognize and address polarizing beliefs among board members to foster a cohesive board environment.

Thank you to our partner, RHR International, for generously hosting this event and for Vanessa Ruda for sharing her insights alongside David Demarest and Keith Dorsey, NACD.DC. Thank you also to Marcel Bucsescu for his exceptional moderation of this important discussion.

The key takeaways and full event recording can be found below. 

VIEW RECORDING

Mission and Values Focus: Board leaders should encourage their boards to step back and focus on their organization’s mission, values, and purpose during difficult discussions.

Boardroom Polarization: Diverse viewpoints, often fueled by strong personal beliefs and experiences, lead to tension. Boards must manage conflict rather than avoid it, fostering trust and open communication. Board directors should be committed to understanding the truth from all perspectives, ensuring everyone is working from the same facts, not biases and anecdotes. Directors should intentionally consider disconfirming information to ensure they understand all sides of an issue.

Board Composition: Moving away from homogeneous boards and bringing in diverse voices is essential for business success. However, the introduction of diversity in the boardroom must be intentional and guided to encourage difficult conversations in a safe environment, preventing conflict. This ensures that much-needed diverse voices don’t end up leaving the board.

Courage and Trust: Boards need moral, intellectual, empathetic, and disciplined courage to navigate complex issues such as ESG (environmental, social, and governance) and DEI (diversity, equity, and inclusion) amid political tension. Trust is foundational for productive dialogue. Boards should build relationships outside the boardroom to ensure open, respectful discussions, including dissent, can take place inside the boardroom.

Leadership and Board Culture: Exceptional leadership combines confidence with humility, thoughtful listening, and curiosity. A board’s culture should allow for disagreement without division, fostering a constructive environment for challenging conversations.

Clear Governance and Conflict Management: Boards should return to basics by outlining good governance practices, a strong value system, and clear conflict management processes, focusing on three types of conflict: task, relationship, and CEO-board. Boards should be intentional about moving controversial issues into value-based discussions that focus on tasks and solutions, as this approach helps prevent conflicts from escalating into personal disputes. A clear framework for managing these conflicts is vital for navigating difficult issues—note the HP board spying scandal.

Impactful Decision-Making: When addressing external crises, boards should evaluate whether their actions align with the business's core values, have a long-term impact on the business, and contribute to shareholder value—note the Johnson & Johnson Tylenol crisis.

Questions for Board Members to Consider When Making Decisions on Potentially Polarizing Issues:

• Instead of asking "What should we do?", ask "What do we know?"

• Do the issues align with our business and core values?

• Do stakeholders expect us to take a certain stance? Why?

• How do we link our position to sustainable value creation?

• Can we make an impact if we do engage?

• Why was this important to us before, and have things changed?

• Where does action or inaction take us? What are the consequences?

• What are our commitments and responsibilities?

• Where do we want to be in the end?

Additional Resources:

• "Boardroom Diplomacy: Mastering the Art of Difficult Conversations" by NACD

• "DE&I at the Board Level" by NACD’s BoardVision Podcast

• "Culture as the Foundation: Building a High-Performance Board" by NACD

This event was generously hosted by RHR International.