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Oct 04, 2012

Beating down the boardroom bully

Is there one person who dominates most of the decision making in your boardroom?

Does he or she manipulate and intimidate others? Are most board members scared to challenge his or her decisions?

If so, you may have yourself a bully.

Bullying can take many forms; it seems some professionals just feel the need to exert power over others to fulfill their personal goals. But there’s been a lot of action in the boardroom of late. In an effort to move away from the traditional ‘all boys club’, many companies are trying to diversify their boards by adding more women. One result is that companies can end up with a mix of personalities, temperaments and attitudes – an issue that is sometimes overlooked.

When bullies dominate the boardroom, it can spell trouble for the rest of the company. Even though other board members may remain quiet, there can be a loss of focus on everyday business issues. Bullying can have an impact on a company’s governance structure and reputation, too; and it can eventually take a toll on the entity’s financial performance. There are no laws governing bullying in the boardroom but it can still be a major hurdle many companies can’t seem to overcome. With the string of corporate failures seen in the last couple of months and the poor governance standards at some companies, however, the enactment of such statues will surely be considered in the near future.

One person who should be able to spot a bully is the corporate secretary, as he or she works closely with board members and can observe the culture of the boardroom. Corporate secretaries should be on the lookout for any strong personalities trying to rule the boardroom.

‘The net effect of this bullying conduct is that the board will likely become temporarily paralyzed and dysfunctional,’ says Sharon Parella, partner at Morrison Foerster. ‘Among other things, the board will endure countless hours distracted from real business concerns and consumed with how to deal and appropriately communicate with this bully.’

Parella says corporate secretaries and general counsel should start providing training to board members as part of their director education programs. Training directors on boardroom bullying and mandating professional conduct will help in setting the tone and culture from the top. ‘Unfortunately, boards are frequently overlooked when such training programs are provided and the articulated basis for such omission is usually that the board is too busy and/or the business of the board is too remote to necessitate a focus on these issues,’ she adds.

Given that governance professionals serve as the enforcers of an ethical workplace, however, they must ensure the board is operating with full awareness of boardroom bullying.

Who is your boardroom bully?

Aarti Maharaj

Aarti is deputy editor at Corporate Secretary magazine