Corporate directors beware. Professor Richard Leblanc, of the Atkinson School of Administrative Studies, is out to shake up the boardroom.
Delving into a traditionally overlooked research niche, LeBlanc has taken the wraps off how traditional boards of directors work. By critically assessing the qualifications and performance of board members, LeBlanc has developed strategies and a list of critical factors that his research has shown are important to building better boards.
On March 8, Leblanc gave a passionate presentation of his research findings, entitled "Enhancing the Effectiveness of Your Board", as part of the Atkinson Distinguished Public Lecture Series.
Left: Leblanc delivers his presentation
Rhonda Lenton, dean of the Atkinson Faculty of Liberal & Professional Studies, opened the event by welcoming the diverse audience, made up of business professionals, faculty, staff and students, plus public, private, and non-profit board members.
Leblanc was introduced by his mentor and colleague Professor James Gillies, co-author of Inside the Boardroom: How Boards Really Work and the Coming Revolution in Corporate Governance. Apart from being the founding dean of York's original Faculty of Administrative Studies and a former member of parliament, Gillies has served on more than 35 boards in Canada, the US and Europe.
Right: Leblanc (left) with his mentor Professor James Gillies
In his presentation, Leblanc described what he sees as an innate malady in most boardrooms. "The biggest problem is effectively assessing and dealing with director competency, behaviour, and chemistry – so the board gels as a team and is the best it can be at making vital decisions," Leblanc says. "These softer skills are below the radar screen, in terms of academic research, governance ratings, and regulation."
Leblanc also gave specific details on strategies to build better boards, including three keys to effective boards, including the selection (not the separation) of the chair; the recruitment, assessment, and retirement of directors on the basis of competencies and skills: and, the behaviours of individual directors and the effectiveness of the boardroom dynamic.
He also identified the "ten C's" that can define the behaviour styles of directors:
- Change Agent
Each of the ten C's has its own particular behavioural idiosyncrasies, explained Leblanc, and understanding them can help those whose job it is to assess and recommend the best people to join a board.
Left: Leblanc, the author, signs copies of his book
Leblanc asserted that the behavioural traits of the other members and the specific requirements of the role should be used to evaluate a potential candidate. Leadership qualities are particularly critical for an incoming chair, said Leblanc, but these are rarely judged effectively because companies tend to rely more on traditional assessments, such as how many boards the person has served on previously, and how well-known they are to recruiters.
Board members have traditionally been judged by the financial performance of the company they direct. But Leblanc points out that "what is readily measurable from the outside of the boardroom, in annual reports and proxy circulars etc., matters less than what is not readily measurable from within the boardroom."
Assessing the behaviour of boards will allow a clearer measure of their performance. Leblanc pointed out that the competencies and interaction of the board members hold the key to untying the relationship to the financial performance of the firm, and showing that better boards make for better companies. The performance of the director should be the basis upon which directors are hired and retired, and not criteria such as age.
In addition to giving a wide perspective on the inner workings of boards and new insights on how to select directors and build more effective boards, Leblanc answered pointed questions from the audience.
After the presentation, a reception and book-signing allowed people to interact more directly with Leblanc and Gillies and meet the other attendees, many of whom share the need to heal a dysfunctional board, or improve one that is functioning well.
Prior to the event, the York University Foundation hosted a cocktail reception for donors and special friends of the University.
To get a clearer perspective on aspects of Leblanc’s presentation, you can watch the video of it. You can also view a copy of his most recent publication, 20 Questions Directors Should Ask About Governance Assessments.