Jun 18 2020| Leadership

Trust - The Indispensable Ingredient for High Performing Boards

Building Trust at Board-Level

by Phil Eyre Founder

We were invited to contribute to the BPP Non-Executive Director Development programme, on the importance of trust. For boards, trust is not just important, it’s indispensable to achieve great performance.

 

The Importance of Trust

 

Warren Buffet said: ‘Trust is like the air we breathe - when it’s present, nobody really notices; when it’s absent, everybody notices.’  He points to the fact that trust is a human factor, an “inner” quality, impossible to achieve via a tick-box approach or a quick on-line course. It’s something that we sense, that we gain from our experience with people. Formal qualifications might bolster our confidence in someone’s technical skill, but we still look for more before completely trusting them.  Think of somebody that you trust; what is it that makes them trustworthy?

 

Trust is crucial to the performance of any team, especially leadership teams and boards. Patrick Lencioni’s seminal work, The Five Dysfunctions of a Team clarifies that without trust there can be no healthy conflict; without healthy conflict there is no commitment nor accountability to compelling objectives or a high-performing culture. In other words, without trust, mediocrity is the best that you can hope for.

 

The directors taking part in our session for BPP overwhelmingly agreed; everyone stated that they need to trust their board colleagues to a very high degree.

 

Yet there is a trust problem. According to research from Edelman, 63% of employees don’t trust their leader.  Our poll with the participants in our session showed a similar truth, with over half expressing concerns with some colleagues and some stating that there ‘are one or two that I trust but the others I treat with a degree of caution’.

 

 

When Trust Breaks Down 

When trust breaks down, we will observe these familiar symptoms in a board or executive team:

 

  • Bias

The lack of healthy conflict creates a bias, sometimes towards a dominant board member (usually the CEO or Chair), sometimes towards an established way of doing things. If no-one wants to rock the boat, little will change.

 

  • Disbelief

A lack of buy-in, even if people say that they’re on board during a meeting. In truth, they don’t believe that action will follow or that the idea is any good.

 

  • Loss of confidence

Individuals lose confidence in bringing their ideas to the table. They have the ideas, but they don’t want to raise them.  Loss of confidence can also be observed in the collective group; confidence to achieve compelling objectives, make a meaningful difference and impact. You can imagine the associated lack of energy in such a meeting.

 

  • Paranoia (and CYA)

As trust deteriorates, paranoia escalates. Hidden agendas, whether real or perceived, create a condition where some board members believe that they are being excluded and undermined. This crushes creativity and risk taking.

 

  • Tactical blocking

When competitive energy is directed inwards, tactics that could otherwise serve the board well become destructive. Individuals are deliberately tactically blocked from contributing, for example, meetings are set for dates known to be a problem for a board member, or locations changed at short notice.

 

Characteristics of a High-Trust Board

Conversely, a high trust board is characterised as follows:

 

- There is a culture of constructive challenge

Different perspectives are actively sought and invited. A meeting that ends with little challenge is considered a bad meeting not a good one, recognising that there must be perspectives missing. These meetings are energetic, sometimes quite heated, but everyone ends the conversation committed to a shared decision.

 

- Engagement is high

Objectives are clear, agendas are transparent and there is a palpable sense of buy-in from everyone. The energy in the meeting is high and positive. Individuals are not reverting to phones or other distractions; they are actively engaged throughout.

 

-  There is confidence.

A high-trust board knows that their purpose is to achieve something meaningful and that this cannot be achieved alone. Each person has a unique and important place, they are “in-it together “and stretching towards achieving something compelling.

 

-  There is a constant search for improvement, building better products, services and cultures in businesses; ensuring optimum process and performance. This requires taking calculated risk, not recklessly jumping on the next best thing, but committing to evidence-based change.  

 

-  Communication is clear and inclusive.

The agenda tabled is the agenda, there are no factions or side-conversations at play. All the information is equally shared. Problems are made clear to all. Future plans - even the most sensitive - are made open within the trusted board setting. No-one feels left out.

 

Building Trust

Trust is built on a healthy respect for each other; not imposed ‘thou shalt respect me or else’, but a willingness to understand differences and actively draw from each other’s strengths and acknowledge self-weaknesses.  This can be achieved in any board context by:

 

  • Building human factors into board evaluations. Good governance is more than whether the right papers and processes are in place; it’s about whether those leading the company are deliberately working toward a high-trust environment. Consistently engage external expertise to review and enhance your team dynamics, just as you would an auditor. Make it an essential element in the operation of your company.

 

  • Invest in building trust. Take time to understand each other better, learn to appreciate your differences and adapt to each other. A facilitated board offsite is a good way to achieve this. For some, a programme that raises self-awareness and team-awareness will be beneficial.

 

  • Intentionally seek evidence that demonstrates trust. Questionnaires/surveys can be useful. Inviting perspectives from outside of the board - advisors, customers, employees, suppliers - can be illuminating.

 

Without a healthy level of trust, performance will be mediocre at best and life just that bit less enjoyable. What can you do to build trust in your team?

 

 

 

About The Author | Phil Eyre

Phil is Leaders’ founder. He has an enthusiastic and inspiring style, drawing on his experience in business, academia and social sectors to help any leadership team to achieve phenomenal performance. Phil has significant expertise in sophisticated psychometrics and in the application of human data for individual, team and organisational success. He has trained with and been mentored by, global leaders in this field, notably Dr Chuck Coker in the US. Phil began his career in the UK offshore finance industry in 1994, working for a wealth management company, Canaccord Genuity Wealth International. Phil was head of the company's Guernsey division, with a staff of 120 and assets under management of £4.5billion before resigning from executive responsibilities in 2008. Since launching Leaders in 2017, Phil has worked with many senior executives and boards primarily in the Channel Islands and City of London. He regularly writes for a variety of business publications and is often invited to speak at events for institutions such as the IoD and the British Army. Phil works closely with clients on focussed projects and long-term retainers to raise leadership standards. He is a popular and inspiring educator and coach who, with the insights gained from psychometrics, is able to accurately detect the strengths and weaknesses in leadership teams and boards. Phil has served on the boards of various charities, ran the Guernsey hub of a national theology college, received accreditation as a pastor in the Baptist Union of Great Britain and is accredited in various motivation and behavioural techniques.

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