Do you lead your board like Margaret Thatcher?

It is January, 1984. The place is No 10. The forum is the British Cabinet’s Overseas and Defence Committee. The subject is the possibility of an attempt to normalise relations with Argentina…Sir Geoffrey Howe is four minutes into the Foreign Office paper on the need to open exploratory talks with the Alfonsin Government. Mrs Thatcher cuts in: “Geoffrey, I know what you’re going to recommend. And the answer is ‘no’.” End of item: nobody argues with the boss.
                                                    - Peter Hennessy, Cabinet, 1986.

The chairman plays a crucial role in determining the quality of decisions made by board members.

If the chairman is a person to whom deference is afforded by the group, the decisions made by the board will be influenced by how the board members predict the chair’s preference for, and expectations of, the final determination.

A chairman must appreciate that in order to ensure a high standard of decision-making by the board he or she should adopt a neutral position while simultaneously eliciting a range of views, and especially perspectives which are the antithesis of the group norm.

Unlike the former British Prime Minister Margaret Thatcher, whose domination of her Cabinet remains the stuff of legend, a chairman should avoid stating personal preferences too explicitly during the boardroom debate.

Group decisions are usually determined by a majority - rather than the minority – rule as I wrote in a 2003 corporate governance opinion column for the now closed CFO magazine.

The minority rule, however, should not be unappreciated, as it can be exactly the position needed to make a better decision, to reverse a “bad” decision, or to add a new perspective to an outcome which is ultimately determined by the majority rule.

If a chairman was so bold as to encourage the minority rule, it must also be understood this will cause dissent in the group. Board members are predisposed to endorsing the most socially-desirable viewpoints of the group and a “deviate” will upset this balance.

The chairman, therefore, must be able to celebrate and support the views of the “devil’s advocate” while simultaneously managing the ensuing furore of the group caused by the dissenting voice.

The “devil’s advocate” must likewise be responsible for the fallout caused by airing a viewpoint counter to the group norm.

There have been several notable examples of chairmen in Australian board history who were Thatcheresque in the execution of their duties because they believed their particular leadership style was the only way to express authority and power.

The more elegant, courageous and influential approach is if a chairman lets the minority have its say, celebrates the “deviate” viewpoint and learns that being the centre of attention can also mean standing outside the spotlight.