Board evaluation, need to assess psychological safety

EFFECTIVE boards are crucial for strong corporate governance. Regular board evaluations ensure boards are functioning at their highest potential, but a critical element often gets overlooked: psychological safety.

EFFECTIVE boards are crucial for strong corporate governance. Regular board evaluations ensure boards are functioning at their highest potential, but a critical element often gets overlooked: psychological safety.

This article explores the importance of assessing psychological safety during board evaluations and provides sample questions to guide the process.

Remember that research shows little difference between successful and failed companies regarding board structure (composition, skills mix, etc). What differentiates boards of successful companies from those of failed firms is the ability of board members to speak up on issues no matter how controversial or uncomfortable they make people feel.

Amy Edmondson, a professor at Harvard Business School, is credited with coining the term "psychological safety". Her research focused on understanding the factors that contribute to successful teams, and she observed that the most effective teams did not just have the best talent but rather a climate where members felt comfortable taking risks.

This included admitting mistakes, asking for help, and offering different opinions without fear of negative consequences.

To describe this crucial characteristic, Edmondson introduced the term "psychological safety", which refers to the shared belief among team members that it is safe to engage in interpersonal risk-taking.

Why psychological safety matters

Psychological safety refers to a team environment where members feel safe to take risks, share ideas, and ask questions without fear of judgment or negative repercussions.

In the context of a board, this translates to directors feeling comfortable expressing dissent, voicing concerns, and offering constructive criticism. This seemingly simple concept carries tremendous importance for effective board operations.

Firstly, psychological safety fosters open communication. When directors feel their input is valued and will not face backlash for raising concerns, they are far more likely to speak freely.

This creates channels for sharing critical information, questions, and alternative viewpoints, enriching the board's decision-making process.

Additionally, psychological safety combats groupthink. Without it, boards risk making decisions based on a desire for consensus rather than critically examining all options.

Psychological safety encourages directors to challenge assumptions and propose diverse perspectives, reducing the likelihood of falling into this dangerous trap.

Psychological safety facilitates learning, improvement, and robust risk assessment. Mistakes can be discussed openly in a psychologically safe environment, becoming growth opportunities.

Boards become better equipped to learn from past errors and prevent their recurrence.

Moreover, directors feel comfortable raising concerns about potential threats without fear of being labeled as negative, strengthening the organisation's risk assessment capabilities.

Psychological safety also boosts director engagement, ultimately leading to a more collaborative, honest, and robust boardroom culture that benefits the organisation.

Signs of psychological safety issues

Several signs can indicate a lack of psychological safety in the boardroom, including:

Directors hesitate to speak up or ask questions, even when unsure: In a boardroom lacking psychological safety, directors may hesitate to share their thoughts, especially if they are involved in questioning a proposal or the status quo. They may fear appearing incompetent or being judged for not having all the answers. This stifles the flow of information and limits access to valuable perspectives crucial for good decision-making.

Meetings are dominated by a few voices, with limited participation from others: When psychological safety is absent, a few dominant personalities might control the conversational space, leaving others feeling intimidated or unheard. This dynamic can silence valuable insights and diverse opinions, leading to one- dimensional discussions and potential blind spots.

Discussions tend to be superficial, with directors avoiding challenging topics: If directors sense potential negative consequences for raising difficult issues, they will likely engage in superficial conversations. Contentious topics, underlying concerns, or alternative strategies may be bypassed to maintain a veneer of harmony, hindering thorough examination of problems and diminishing the quality of board decisions.

Decisions are often made by consensus without genuine discussion of alternatives: A lack of psychological safety can result in pressure to conform and a desire to reach consensus at all costs. Directors might agree to decisions without fully expressing their concerns or exploring different options, leading to suboptimal choices and potentially failing to address critical considerations.

There is a fear of retaliation for expressing dissenting views: In an environment where dissenting opinions are met with criticism or negative consequences, directors are less likely to challenge ideas or offer differing perspectives. This fear silences healthy debate and can lead to an echo chamber where crucial flaws or concerns go unaddressed, undermining the board's decision-making function.

Integrating psychological safety assessment into board evaluations: Traditional board evaluations often focus on performance governance structures and individual director competencies. However, neglecting psychological safety can hinder the board's effectiveness.

Here is how to integrate psychological safety assessment into board evaluations:

Develop survey questions: Craft survey questions that address factors contributing to psychological safety.

Sample Questions:

  1. Do you feel comfortable expressing dissenting views or concerns during board meetings?
  2. Do you feel a sense of mutual respect and trust within the board?
  3. Do you feel encouraged to ask questions and seek clarification without fear of judgment?
  4. Do you feel there are opportunities to offer constructive criticism without being seen as negative?
  5. Do you feel a sense of shared accountability for decision-making and performance within the board?

Facilitate open discussions

During board evaluations, consider allocating time for open discussions about psychological safety, which can be conducted with individual directors. Encourage board members to share their perspectives and experiences anonymously or confidentially.

Focus on solutions

Once areas needing improvement are identified, work collaboratively with the board to develop strategies for fostering psychological safety.

This could involve setting ground rules for respectful communication, encouraging active participation from all members, and addressing any existing power dynamics within the board.

Assessing psychological safety

Organisations can reap several benefits by incorporating psychological safety assessments into board evaluations.

Focusing on psychological safety fosters a more open, collaborative, and respectful board culture.

This leads to improved board effectiveness, where boards are better equipped to make informed decisions, manage risks effectively, and hold themselves and management accountable.

Additionally, high-performing directors are often drawn to boards prioritising psychological safety, aiding talent recruitment and retention.

Finally, investors and other stakeholders gain confidence in a well-functioning board that fosters open communication.

Psychologically safe boardroom

Fostering psychological safety is an ongoing process requiring all board members' commitment.

Here are some tips to achieve this: Set ground rules for respectful communication, active listening, and open information sharing.

The chairperson and other senior board members should lead by example, modeling respectful behavior and actively encouraging input from all directors.

Normalise dissent, making it clear that dissenting views are not only tolerated but encouraged for well-rounded decision-making.

Approach feedback and challenges as opportunities for learning and improvement. Finally, invest in regular team-building activities to help build trust, rapport, and psychological safety among board members.

  • Nguwi is an occupational psychologist, data scientist, speaker and managing consultant at Industrial Psychology Consultants (Pvt) Ltd, a management and human resources consulting firm. — or e-mail: [email protected].

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