How to Beat Bedlam in the Boardroom – Managing Boardroom and Shareholder Disputes

By Jane Gunn

“Whatever is unspoken is the hardest to change”

“You have brought to us hindsight from the future”

Roger the chief executive of an IT company called me one day to ask for my help. “I have just received another email’ he said ‘It’s the third this week and I really don’t know what to do next!”

Roger had joined this small family company back in the 1980’s and had literally grown with the company which was now distributing computing products worldwide with subsidiaries in the US and Paris. What Roger was best at was selling. He just loved the sales side of the business and the rapid growth of the business was mostly due to his sales acumen.

After 18 years in the business Roger was delighted to be offered a seat on the board, it seemed like a great step up from sales manager and a reward for all his hard work so far. Then two years ago, Roger was appointed CEO and now he really did feel as if he had made it.

His family was proud, his colleagues were pleased, but somewhere at the back of Roger’s mind was a nagging doubt. Secretly (and Roger didn’t dare voice this to anyone) Roger missed his job in sales. He liked all the people that he worked with many of whom had grown up through the company with him, but now he had to manage all the people issues that arose on a day-to-day basis. He was rapidly getting out of his depth.

The current crisis involved the new human resources director, Charlie. Roger had interviewed Charlie himself and he seemed a nice enough chap with all the right qualifications. Roger was sure he would settle into the job given enough time and support.

The other directors did not seem to share his optimistic view. Roger had received a number of ‘confidential’ emails from some of the other directors complaining about Charlie and suggesting that he wasn’t pulling his weight, often coming in late or going early; was not a team player, failing to deliver on promises or actions agreed at meetings; was a poor communicator failing to lead his team effectively and was generally regarded as the weakest link in the organisation. Clearly, the other directors were discussing the Charlie situation amongst themselves and then firing emails off to Roger.

On the surface, everything was fine. Recent board meetings were conducted without reference to the secret messages passing between the other directors and Charlie was blissfully unaware of the drama unfolding behind the scenes.

The Thin Veneer of Sociability

Conflicts in the boardroom or between fellow directors or shareholders can escalate rapidly, diverting time and attention away from the core business.

Charlie is blissfully unaware of the situation unfolding at work and how his co-directors feel about him. Roger does not know how to deal with the complaints from his fellow directors and he does not realize the impact that the conflict at work is having on his home life and relationships – no-one is speaking about the things that really matter.

On the surface everything can seem fine but behind the scenes tensions and tempers are rising that may lead to unresolved conflict and perhaps a legal dispute.

The challenge is the reluctance to address a challenging situation, have a difficult conversation and perhaps identify “The Elephant in the Room”

Our true thoughts and feelings are often hidden behind the thin veneer of sociability. Signs and gestures such as a smile or handshake and clichéd conversation can create an illusion of safe and friendly relations and enable us to delay dealing with important issues – sometimes for years

The mask or veneer we use to front our communications with others can both prevent them from knowing us well so that they don’t appreciate our good points and deter them from raising issues that are affecting our relationship so that we are unable to deal with our bad points.

Part of the problem is the perception that conflict is bad for business and a negative force to be avoided at all costs.

In fact, the opposite is true, and conflict can be the magic ingredient in navigating through challenging times, enabling tensions and issues to be identified and resolved much earlier saving time, money and heartache.

Conflict is quite simply the process of people expressing their dissatisfaction with one another. It may take the form of:

• Silence – not speaking to one another

• Talking behind someone’s back – gossip and innuendo

• Withholding information

• Sabotage

• Fighting – taking action

People express their dissatisfaction in different ways depending on their own past experience of how to handle disagreements. Their reaction may be active shouting, angry words or physical violence, or it may be passive bullying, sabotage or gossip.

And so, conflict can be a very good thing. If we never experienced a sense that things are not OK as they are, there wouldn’t be any reason to change.

Dissatisfaction is a catalyst. It helps us to become aware when something isn’t right and encourages us to search for ways to make it better.

The earlier we can alert our fellow directors, shareholders or co-workers or of our unhappiness, the more likely we are to be able to have a constructive dialogue and look for mutual solutions rather than create a destructive spiral of sulking, backbiting, sabotage and even litigation. Sometimes, we need the help of someone outside the situation to help facilitate a safe exchange of views.

With the help of a mediator, Roger and Charlie were able to safely explore and communicate the real issues between them and to create the basis of a more constructive working relationship. Roger was able to discuss, at least privately, the strain that his promotion to CEO was having on his relationships as work and at home and to seek help and support where he most needed it, delegating some of the tasks he found most difficult to other directors.

Beyond doubt we are now living in a Cycle of Crises where the future for all businesses is uncertain and yet critical decisions must be made to ensure survival.

What we need most are the skills and tools to help us to explore and communicate the depths of our dissatisfaction and unmet expectations and to resolve conflict before it becomes dispute. Feeling safe to sometimes drop the mask and to express our own dissatisfaction at the right time and in the right way can enable us to address issues and to have deeper and more meaningful relationships with others.

In a Nutshell

Mediation and the skills, tools and mindset of mediation help businesses to survive and thrive in times of change, challenge and crisis and to manage the inevitable tensions that arise in the boardroom and with shareholders.

"I’ve always believed that a lot of the troubles in the world would disappear if we were talking to each other instead of about each other." Ronald Reagan