Julie Garland Mclellan has posted another of her Director’s Dilemmas. This time I had the interesting task of coming up with one of the three “answers” or commentaries, and used decision mapping to derive my recommendations. Here is the map:
Click on the image or here to view the zoomable pdf file.
Transcribing the map into prose yields the commentary:
Donna’s immediate issue is whether to accept the request to take the Chair….
Donna has three main options: accept the Chair, decline, or escape the issue by resigning. On moral grounds she should accept, given that she is the most appropriate person – the other Directors have chosen her – and it would satisfy her sense of responsibility to the majority of shareholders. Greater demands and stress would be offset by increased remuneration and status.
Once Chair, she would have at least three courses of action with regard to the troublesome Director. First, she should try to convince the trustee to replace the Director. Her “awareness” that the trustee would not support replacement sounds vague and may be ill-founded. Removing the troublesome director would resolve the crisis unless the trustee appoints another ill-suited person.
Failing that, second, Donna should attempt to manage the situation. One option is to try to moderate the Director’s behaviour. The previous Chair’s failure suggests this is unlikely to succeed; however a fresh approach may work better. Donna should bear in mind the “fundamental attribution bias”, whereby we exaggerate the extent to which other peoples’ behaviour is driven by supposed personality traits rather than contingent circumstances. Another option is to contain the misbehaviour by meeting with other Directors and senior management to establish strong Board processes and norms.
In blocking the troublesome Director’s ambition to be Chair, the Directors were accepting the risk of his forcing an EGM. Perhaps the situation will only be resolved in this manner. Consequently Donna must, third, prepare for the EGM so as to try to ensure the best outcome for the company.
How does my commentary compare with the two others, which were by people with considerably more board experience?
- There was a large overlap in the range of options that were considered across the three commentaries.
- Julie’s commentary tended to offer more detail and nuance with regard to a selection of options that we both considered.
These observations suggest (very anecdotally of course) that a systematic approach to decision making can to go a fair way towards making up for lack of domain knowledge; and more generally that there is such a thing as relatively generic, domain-independent expertise in thinking for decision making. Of course, the best decision maker would combine both generic expertise and detailed domain knowledge.