The Best Boards Are Made of People Who Won't Edit Themselves

In The Wall Street Journal's CEO Brief, Lila MacLellan introduces something new: a ranking of the boards behind America's largest companies. In The Best Boards (and the Factors That Make Them), she explains how Bendable Labs, working for the WSJ Leadership Institute, scored S&P 500 boards on 11 metrics across five categories, from directors' experience and governance to financial performance and future readiness. Intuitive Surgical took the top spot, joined in the top 25 by names such as Costco, Mastercard and Visa, along with less familiar companies.

The detail that caught MacLellan's attention also caught mine. One category measures group dynamics, and in particular whether a board is likely to defer too much to its CEO, its management or itself. Bendable's co-president, Rick Wartzman, told her the model rewards boards where 30% to 50% of directors have experience in the company's industry. Too few, and management can roll over the board. Too many, and the board risks groupthink. The team also looked at signals of whether directors are likely to question management at all, asking whether a boardroom makes room for alternative views or simply rubber-stamps decisions.

I think this is the most important idea in the ranking, and it goes well beyond governance.

Deference Is an Edit at the Top

A deferential board isn't usually full of weak people. It is full of accomplished people who have learned that the room rewards agreement. Over time, they edit themselves. They hold back the question that might slow the meeting, soften the concern that might sound disloyal, and save their real view for the hallway afterward.

That is the same pattern I see at every level of organizations. People bring a polished version of themselves to the room and leave the most useful part, their honest judgment, at the door. When it happens on the front line, a team misses a better idea. When it happens in the boardroom, a company can miss the moment that defines its future.

I wrote earlier this month about a related blind spot, after the Journal looked at what boards aren't told, in Boards Audit the Numbers. Few Audit What People Are Allowed to Be. The new ranking adds a mirror image. Boards also need to examine what their own members feel free to be.

Diversity of Experience Only Works if It Gets Spoken

The industry expertise sweet spot is a smart insight. A board with a mix of insiders and outsiders has a better chance of seeing what a single perspective would miss. But a mix of backgrounds on paper doesn't guarantee a mix of views in the conversation.

A director from another industry is valuable only if she asks the question that seems naive to insiders. A director who has run a similar business is valuable only if he says when something doesn't match what he has seen work. Each person was chosen for what makes them distinct. The board gets that value only when each person feels free to use it.

This is where I think the ranking points to something leaders everywhere can learn from. The information a board needs to make the right decision is usually already in the room. What is often missing is the conviction to put it on the table. People tend to say what they really think once they have nothing left to lose, which is exactly the dynamic I described in Why People Wait Until They Leave to Tell the Truth. The best boards don't wait for a departure to hear the truth.

What Chairs and CEOs Can Do Now

Good governance depends on structure, and that structure deserves credit. Clear committee charters, independence standards and regular evaluations are what make a board reliable from one year to the next. The opportunity is to use that structure to protect individual judgment rather than flatten it.

A few questions worth bringing to your next board or leadership team meeting:

When was the last time a director changed a decision by disagreeing out loud? If no one can remember, the room may be more deferential than it looks.

Does each director know why they were chosen, and is the board actually drawing on that? Ask every member what they see that no one else at the table sees.

How do dissenting views get recorded and revisited? A board that tracks only its decisions misses what it learns from its disagreements, and the director who was right last time deserves to be heard more carefully next time.

And for CEOs: do your directors see you welcome a hard question, or do they watch you defend against it? Boards take their cue from how the chief executive responds.

The Journal's list rewards boards for performance and for being ready for the future. Both depend on the same thing: a room where accomplished people bring their full judgment instead of a polished version of it.

A board earns its value when every member feels free to say what only they can see.

Want to explore these ideas further? Learn more about my work on leadership, identity and conviction at www.theglennllopis.com.