IMHO: Is governance a team sport or individual sport?

OPINION: I’ve been looking at quite a few sports governance reviews recently. It reminded me of a conversation I had with an emerging director: "Is governance a team sport or an individual sport?" 

My answer is unequivocal. Governance is a team sport. And boards are the team. But a team of individual high-performing athletes. 

Each director brings their own set of skills, expertise and perspectives, and they must all work together for the good of the organisation. While individual directors may be exceptional in their own right, it is their collective effort, decision-making and collaboration that ultimately drive success.

Boards as collective decision-making bodies

The nature of a board's work revolves around making informed, strategic decisions that guide the future of the organisation. No one person holds all the answers, and as governance best practice in New Zealand affirms, the power of a board lies in its collective expertise. This is enshrined in key governance principles such as those laid out in the Four Pillars of Governance Best Practice which clearly outline the responsibilities of a board as a unit, not as a collection of individuals working in isolation.

In governance, the term "collective responsibility" is not just a phrase – it’s a guiding principle. This means that each director must have an understanding of all matters that come before the board and cannot rely solely on the expertise of others.

At the same time, it is also essential that directors leverage their individual expertise to enrich board discussions. A director with deep financial expertise, for example, may offer critical insights during discussions of financial statements, but the final decision is still a shared one, taken with input from the entire board.

The Four Pillars stress the importance of collective decision-making – no single board member, including the chair, acts independently. The board must function as a cohesive entity that debates, deliberates and ultimately reaches decisions that reflect the best interests of the organisation and its stakeholders. This collective responsibility ensures that decisions are well-rounded and incorporate diverse perspectives.

The power of diverse thinking

The effectiveness of a board increases when it is composed of individuals who bring diverse skills, backgrounds and experiences to the table. Diversity in board composition fosters healthy debate and mitigates the risk of "groupthink," which can occur when members are too similar in perspective or experience. Boards are at their best when they challenge each other to think more broadly and critically.

As highlighted in the IoD Getting on Board with Diversity guide, "Diversity on a board is vital but should always be approached through the lens of demonstrated competence" Each director brings something unique, but it is in harnessing these diverse viewpoints that boards can truly excel. The guide stresses the importance of creating an inclusive boardroom culture where all voices are heard and respected. This is particularly important for avoiding blind spots in decision-making and ensuring that the board’s actions are well-informed by a range of perspectives.

Role of the chair in collective dynamics

The chair is pivotal in shaping the board's culture and ensuring it operates as a unified body. A good chair knows how to bring out the best in each director, encouraging input from quieter members while managing the more vocal participants. The chair's leadership ensures that all contributions are valued and decisions are truly collective.

The chair must foster a culture where directors feel comfortable expressing dissent and challenging ideas. By setting the right tone, the chair ensures that the board does not shy away from difficult conversations but engages in meaningful dialogue that strengthens decision-making.

Avoiding the pitfalls of individualism

While each director is appointed based on their individual merits, the strength of a board comes from its ability to integrate these individual talents for cohesive decision making. 

A common pitfall is when directors operate too independently, focusing on their personal agendas or areas of expertise without considering the broader strategic goals of the board. This can lead to fragmented decision making and undermine the board’s effectiveness. Boards must guard against this by fostering a culture of collaboration, where individual expertise is valued, but the collective goal remains paramount.

Fostering a collaborative board culture:

• • Commit to a shared purpose: Board members must be aligned with the organisation’s vision and strategic objectives. This shared commitment underpins every decision the board makes.
  • Open communication: Encouraging open, honest communication in the boardroom is crucial. Directors must feel safe to express their opinions, even if they differ from the majority
  • Structured decision-making processes: Processes for how decisions are made must ensure that all directors can contribute and that no one individual dominates the conversation. This also allows the board to remain focused on the best outcome for the organisation
  • Regular board evaluations: Continuous improvement is key to maintaining an effective board. Regular evaluations allow the board to assess its performance and make adjustments to ensure it is functioning as a cohesive unit. This includes assessing whether directors are contributing effectively to collective decision making

In summary, a board is very much like a sports team – a group of high-performing individuals who must work together to achieve a common goal. Success in governance is not about individual accolades but about the collective performance of the board as a whole. By fostering a culture of collaboration, leveraging diverse perspectives, and maintaining a shared commitment to the organisation’s success, boards can achieve their full potential as collective decision-making bodies.

AI assisted in the creation of this article.

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KP is the Chief Executive of the Institute of Directors. She is a qualified lawyer and a Distinguished Fellow of the Human Resources Institute of New Zealand. Her governance roles include:

Chair, Global Network of Directors Institutes (GNDI)
Chair, Brian Picot Ethical Leadership advisory board
Trustee, Voices of Hope
Board member, XRAP Advisory Panel, External Reporting Board (XRB)
Ambassador, Wellington Homeless Women’s Trust. 
With extensive governance and leadership experience, she is actively involved in community initiatives.

A strong advocate of diversity, KP was also a founding member of Global Women’s ‘Champions for Change’, a group of senior executives and directors who commit to diversity in the workplace, and a founding member of WiSPA, an organisation promoting women in sport, and mentors a number of business leaders. KP was also previously Director of the NZ Rugby Foundation.