When to remove a board member and how to manage it
Boards can be complex, challenging and even disjointed if there is conflict. Sometimes you simply have to remove a board member.
There can be a range of scenarios where a board member or members no longer feel like a cohesive part of the board. For all the good intentions and robust hiring process, that newly hired member could simply not be a long-term fit.
Alternatively, you may have a legacy board member conflicting with a new leadership team, a family board situation that has become toxic, or simply a board member’s priorities have changed, therefore impacting the whole of leadership team.
Conflict can happen between board members even if you have the best people. These conflicts can be small, indirect disagreements, large full-on arguments, or the result of poor performance, like free-riding, which can impact the entire group and the operations of the business.
Most conflicts can be addressed, and small disagreements are par for the course. Indeed, they should often be encouraged to a certain extent. Healthy disagreement – or passionate discussion – mean the board is diverse and has multiple perspectives contributing to the whole. New and interesting ideas can come out of these types of disagreements and having a diverse board is recommended.
CORRECTIVE ACTION PRIOR TO TERMINATION
However, sometimes a director does or says something that is not acceptable. We’re all familiar with the uncomfortable moments when someone has crossed a line. Good leadership and a plan for dealing with these situations can usually resolve them fairly quickly.
For example, the offending director might be asked do some professional development, like take a governance course. Other suggestions include an open conversation with the chairman is the more appropriate response. Either way, don’t let the situation fester into something more serious – nip it in the bud.
As a general rule, corrective action is the best way to deal with a misbehaving director, and a director should only be terminated in extreme situations. Directors should not be removed from a board just because of personality conflict, for not pulling their weight, or taking an unpopular position. Being a nay-sayer or being glued to their phone during meetings doesn’t justify a removal.
Removal in extreme cases, the board may have to remove a board member.
Here are a few examples:
- A director doesn’t disclose a conflict of interest, and then personally benefits from a board decision. This would be considered a significant breach of trust.
- A director carries out a task or attends a meeting while under the influence of drugs or alcohol. This is inappropriate and can lead to further behavioural issues.
- A director spends the company money on personal expenses. This is not only unethical, but probably illegal as well.
Termination is necessary. What’s next?
Regardless of the issue, removing a member of the board won’t be easy. In fact, it can create more conflict amongst board members.
In some cases, you can handle the removal of a director privately. For example, the chairman of the board can have a frank (but delicate) conversation with the director about the board’s concerns and ask for their resignation.
In most cases, a reasonable director will understand and resign.
Sadly, not everyone is reasonable. For example, if the errant director feels they’ve been wrongly accused or attacked, they may refuse to resign. In this case, the board will need to follow the process for removing a director.
HOW TO AVOID HAVING TO REMOVE A BOARD MEMBER
A board can plan for succession and have a guide to work through tough situations like this one.
You can’t predict every possibility but having good policies in place and directors that understand this is essential to avoiding difficult situations, and handling problems when they do come up.
King Executive – Selecting High-Performance Leaders for Forward Thinking Businesses across the Southwest. We are a leading executive search and headhunting firm. We work with Owner Managed Businesses through to Private Equity Backed growth firms and PLC’s. We champion Executive Women and we aim to offer an even gender split on all of our shortlists. Contact our CEO Helen Plumridge: 07808 537696 | firstname.lastname@example.org