Governance Bites #103: safe spaces in the boardroom, with Steven Moe

In this episode, Mark Banicevich asks Steven Moe about safe spaces in the boardroom. Steven opens by explaining the context, and who safe spaces are for. They discuss whey safe spaces may be necessary, how they are implemented, and what sort of behaviour results in needing safe spaces. They discuss the importance of safe spaces, and how they enhance an entity's governance. Steven also shares advice for experienced directors. 
Steven Moe is a Partner of commercial law at Parry Field Lawyers in Christchurch, and an experienced director. Steven qualified as a lawyer in New Zealand, and worked for more than a decade on corporate transactions worth billions of dollars while based in London, Tokyo and Sydney. He has written several legal books, including “Start-ups legal toolkit”, “Social Enterprises in New Zealand: and “Capital raising for founders”. Steven also facilitates governance law on the Company Director Course for the Institute of Directors (IoD). His Seeds Podcast, which he founded in 2017, has almost 400 episodes, interviewing interesting people about their lives. He also hosts the Board Matters podcast for the IoD, now in its third season. 
Steven Moe’s profile on LinkedIn (he is happy to connect with you): https://www.linkedin.com/in/steven-moe-0b3b008a/
Seeds podcast with 430+ interviews www.theseeds.nz
Board Matters podcast https://open.spotify.com/show/6aHNCIYEOwqoghkGlwKruU 
Parry Field Lawyers governance resources: https://www.parryfield.com/advisory/governance/governance-essentials/
#governance, #leadership, #corporategovernance, #boardcraft, #decisionmaking, #makingadifference, #ceo, #governancebites, #boardroom, #director, #safespaces

Transcript

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Hey, kia ora everyone. It's Steven Moe here. I work as a lawyer and do a lot in governance, and it's a real pleasure to be here today to talk about safe spaces around the boardroom. Hi, my name is Mark Banicevich. Welcome to Governance Bites. As you just heard, I have the pleasure again of spending time with Steven Moe. Steven, thank you very much for your time. You're welcome. I'm really enjoying this. Oh, this is, it's been great. You're, you're a podcaster yourself with the Seeds Podcast, and you do the Board Matters podcast for The Institute of Directors [IoD]. Of course, you've done the Advanced Directors Course. You chair a number of boards, as well as being on a significant number of boards. You're a partner at Perry Field Lawyers, and just an absolute guru in the space. Such an experienced person, so I really appreciate the opportunity to pull some of that knowledge out and throw it out into cyberspace. No problem. Thank you very much. Safe spaces in the boardroom, I know, is also a theme of the third series of Board Matters. Can we start with the context? What do you mean by safe spaces around the boardroom? Yeah, so we came, so IoD has had this podcast called Board Matters, and they came for the third season and said, "We want to talk about creating safe spaces," and I said, "That sounds great." So, we recorded a whole bunch of interviews on that particular topic. What we're meaning by that is that everyone feels like they're able to share at the boardroom table. And unfortunately, sometimes boardrooms don't have, have that free-flowing conversation, and some people might feel intimidated or that they're not able to share. So, it kind of, you know, we're going to get into words like vulnerability and transparency and openness, but it's trying to encourage a culture at the boardroom table where everyone is free to share. Are you talking about sharing a perspective that may be different from other perspectives, may be challenged, or you're also talking about the ability be vulnerable and say, "I don't actually know what we're talking about."Can you explain it to me?" It's both of those things. Yeah. Think of it in the widest possible sense. The other way that it might be a safe space is the start of the meeting,"Hey everyone, I just want you to know that I just lost my father, and this is really hard for me to"say, but he was a big influence in my life, and I just want you to know that as we start the meeting"that, you know, this is weighing heavily on me." And so you might not feel like you could share that type of information. I'm not going into all details of every possible thing you're facing, but I think that's an element of a safe space in a boardroom is that you actually are able to feel like you can share and you can be a human, and things can, you can be having a bad day. Yes. Or a bad week, or a bad month. One of the best examples I've seen of starting board meetings is not, "Let's turn to agenda item number one," but instead saying, "Hey, let's take a couple"minutes. What's going on in your world? Like, tell us a bit, some personal news or something that's"happened. Let's be humans before we get into the detail." And I think too often we get stuck on,"We only have two hours for this meeting," or "We have one hour for this meeting." We forget about that sort of whakawhanaungatanga[establishing and strengthening relationships], you know, face-to-face, getting to know each other, elements here. It's interesting. I see an overlap with the level 10 meeting from the EOS, (Entrepreneurial Operating System), where the first five minutes, I think, of the level 10 meeting is, "Give us some news." Oh, really? You know, tell us, share something. Yeah, I didn't know about that, but that sounds like very similar to what I've seen. The same concept. I think it works really well. It's a great concept. Of course, it can, you know, you have to, as the chair, you probably need to rein it in if it becomes a 10-minute thing. Yeah. But sharing just a short little, "I'm feeling a bit stressed because it's our financial end"of year and whatever," or "I just got news that my daughter made it into the university she'd"been dreaming of getting into," you know, like it just makes you a bit more personal, and you know, more more human. I think its a wonderful concept. And too often, I think it's just straight into,"Right, agenda item number one." Of course, even before the meeting, ideally, you've been able to share some food together or have some connection or have a drink or whatever it is, because that's another way to get to know each other. Absolutely, yeah. Thank you. Who are safe spaces for? You know, in the board, you've got directors. What about for management who might step in and do the odd presentation at the board meeting, or anyone else involved in governance? Yeah, I would want it to be, so it comes back to the culture in my mind. What culture are we creating? I would want it to be safe spaces for everybody, that everyone can feel like they can come into the boardroom and talk and share openly, and that would include the CEO. And I think you start to have problems if you're not getting people sharing, and if the CEO is actually struggling but feels like it's not safe to mention that. You know, in my experience, you know how there's board-only time at the end of a board meeting? I'm sure we've all seen that. Those five minutes, ten minutes, whatever it ends up being. Usually, in my experience, it's the directors talking about, "How can we support our CEO?"How can we make sure they have the resourcing they need?" And I don't think CEOs realise that the board-only time is very often, "We want to help this organisation to grow, therefore we need"to help the CEO." So, I would like to think that the CEO would feel like they can actually raise things. And yeah. Sometimes in companies, you have people from the business coming and presenting to the board, whether it's a member of the management team rather than the CEO, or even somebody potentially a little more junior in the business. What then can the directors do so that those people who are often really daunted in their first board meeting can feel safe when they're entering their first board meeting? Yeah, I guess this comes back to a theme that we talked about before, but making sure that the board is ready to have a discussion about, because presumably they're there for a purpose, and maybe they prepared a report. So, it's kind of disheartening if you show up at the boardroom and you see all the directors are trying to quickly skim read the report. Like, do them the courtesy of having read the report, and then the chair can say, "Thank you so much for"coming to present. We've all read your report, and we'd like to ask you some questions," you know, rather than, "What was this report again? Can you just summarise it?" You know, so, and then when it's time to ask questions, the challenge is doing that in a tactful way that the person doesn't feel like they're under the spotlight with seven pairs of bearing eyes, and they can feel comfortable sharing their expertise. And, because quite often a question will come out, well you'd hope from the directors, a question would come out they weren't prepared for, because that's the director's job to come up with those things, right. That's right. So, making them feel comfortable and safe when you're asking them questions they may not be prepared to answer, that would be a very big challenge. That's right. And it comes back to something we've spoken on before, which is purpose. Like, what's the purpose of the organisation? If the person is there and they've done a report or whatever, they're probably aligned in their purpose. Like, we're on the same team here. We're not accusing you, or we're not doing anything. We want this organisation to grow and be the best it can be, so we're here to hear you. We want to listen. We have some questions. Right. Why could it be necessary to have safe spaces around the board, around the boardroom? Well, unfortunately, and I'm sure you know, we don't need to name any boards, but we've all been on boards where it hasn't felt safe. And that could be because the chair is dominant, and they're basically telling the board, "Here's what's happening." They're not creating a safe space where everybody is able to share. The worst-case scenario here would be at the end of the board meeting, the chair comes up and says, "You know, I'm going to be"talking to the shareholder because you're not contributing the way that I expect, and you're"going to be out unless you change," you know, like there can be these threats. And so, the point is that there can be negative cultures. So, what we're talking here about is creating a positive culture where you are able to share, you 're able to be vulnerable. Potentially, you are able to say, "I really don't understand page 17, note 2. Why is this a...?" Whatever. You know, like, and "I don't understand. Someone please tell me." Usually, when you raise something like that, someone else in the room was about to raise it as well, you know, like it's very common. I get this all the time, and I think, "Oh, I should have said it, because look, they just asked the same"question." Yes, right, right. And the importance of the board is by having those, you have to have those disparate views come forward. And if somebody is not feeling safe and not contributing, you're not getting the value of them being in that chair. That's exactly right. And the point of having a diverse board is that you're getting different perspectives. So, I would want to hear from the 20-year-old, and I'd want to hear from the 75-year-old, and I'd want to hear from the person from a Pasifika perspective, or all the things that I don't know. I can't know. And that's why we're all here together. Right. Yes. How are safe spaces implemented by boards of directors? So, I think it comes back to being proactive and about creating the safe space. And the best way that I can think of it is actually taking a bit of time outside of the meeting itself. So, this could be, "We're going to go have dinner together," or"We're going to have lunch together," or like I just did with a board I'm on, "We're going to go and visit,"visit one of our clients, and we're going to see the space that we're helping to fund, and"we're going to sit with them. We're going to have some sushi together. We're going to get a tour,"and then they're going to tell us about their plans for the future, and we as a board are"doing it together." So, that it's not just a line item in a report. So, building up those shared experiences is really critical. But this comes back to something we've talked about before, which is the role of the chair. So, I think ultimately the chair needs to be creating the safe spaces, by allowing openness and enough space for people to be talking. Right. Right. Why, how? Let me jump onto the question I'm up to. What sort of behaviour can lead to a need for a safe space? Well, unfortunately, there is narcissistic, selfish behaviour of people who come in with their own agenda. And I think sometimes this can happen even from a Western cultural perspective. Like,"I'm on this board. Look at my CV," you know, like, "Look at how important I am because I'm on"this board," particularly if it's a listed company or you're paid to do it. And I think that doesn't serve the organisation well if you end up with a whole room of individuals who are there just so they can pad out their CV and look important. Yes. So yeah, you need to, but if you do have somebody like this, then hopefully the others are able to create, still create the safe space where actually we can be open. One of the things that could be damaging to a safe space is a particularly disruptive director. You were talking about experiencing vulnerability and expressing that vulnerability. And if you have this sort of cynical person that makes light of those things, you know, jokes about them, it can be quite hurtful. As a chair, how would you deal with that? Well, I think you'd probably have to take the person aside, outside of the context of everybody, and talk to them about it. The interesting question is, what if it is the chair? Because that happens. Yes. And if the chair is the one who's breeding a culture of distrust and lack of vulnerability and safe spaces, then my only advice on that really is consider raising it in a third-party way. So, in other words, "We want to have the best governance possible. Let's"get an outside consultant to come in, and they'll do a board assessment." Like, Boardworks is one example of a group that can come in. They'll observe your board, they'll write a report, and then hopefully it highlights that the problem is the chair. Yes. And, but it's not you as the other board member who raised it. Right. Yeah, that's really good advice. How does safe spaces enhance the governance of an entity? I think it actually allows all of these perspectives to be shared, which then allows people to be able to have different viewpoints, and that ultimately will lead to a better outcome for the decision. So, we're coming to this decision, and if nobody, you know, "Here's the proposition. We're going to buy this property for $5 million," and, and everyone says, "Okay, sounds good," you know, like there's no rigour there. There's no pushback. But if there's safe space, then the board members are going to be able to say, "How did we get $5 million?"Like, why are we spending that much? Like, surely we could get it for $3 million,"or the location, why are we choosing this part of the city? Shouldn't we be over in this part"where our customers are?" Or, you know, you get the point. It's like, if you don't feel like you can raise things, then you're not going to get the best outcome possible. So, in summary then, a safe space in the boardroom means that everybody in the boardroom has the comfort to say whatever they need to say as part of their role, which may be, "I don't understand." It may be,"What about this point you may not have thought of?" Even if it's unpopular. It may be, "I personally am struggling at the moment for this reason. You know,"please be a little bit sensitive towards that." If you have that safe space in your boardroom, then you're going to draw all the best value out of all of the members of the board, which is why they're there to contribute, to enhance the organisation through good governance. That's exactly, that's exactly it. It's a really good summary. I think, in the season three of Board Matters, I talked with Eugene Berryman-Kemp, who's a really experienced director, and he gave a story just to make it really practical. He was the chair of the board, and they were discussing an issue, and one of the board members, who is a younger woman, so there was a bit of cultural context here because it was an iwi-based [Māori tribe] board as well, and then there's, you know, he's a man and a younger wahine, a woman. Anyway, she raised her hand and said, "In the board-only"time, I'd like to raise something." So, he noted that, and, "Okay, when we get to it,"we'll have a discussion." And so, the CEO left, and they had the board-only time, and she said,"You're telling us what we should do. You're not allowing us to have a discussion." And so, for him, it was very confronting, but he reflected and thought, "Actually, you know what? That"there's some wisdom here. I need to change how I'm approaching my boardroom culture." And so, he was able to positively respond and change things. But it's a good example of, you know, needing to allow people to share and do it in an appropriate way. And kudos to her for raising it in a culturally appropriate way as well, that, you know, we need to think about this and talk about it. And potentially, the room was safe enough for her to feel confident to say that, as well. That's right. Yeah, so he had done a good job that it was possible to raise it. But it was a good example, I thought, where he had the wisdom to know, "Yeah, I need to, I need to actually change things." Yeah, brilliant. So, reflect on the boards that you're part of, and think about this. "Do I feel safe? How do we create"safe spaces in the boardroom?" And I think it will enhance governance across the whole country. And something else that you raised earlier was commend in public and recommend in private. So, if you do have to raise an issue with the chair because things aren't going well, you may want to do that in a private conversation with the chair rather than sticking your hand up in the boardroom. Yep, that's, that's right. It's going to come down to the personal dynamics, and I think there's a lot of wisdom in having those conversations. But you have to trust each other to be able to do that. And you're probably going to build up the trust better if you've had dinner together, or you know that their daughter just got appointed to be the head girl of the high school or the, you know, like, - Yes. - that's important too. I think too often we limit that and say, "Yeah,"but let's get on to the financial reports," you know, like that's the key things. It's those interpersonal dynamics that are also important, as well. Absolutely. Final question for you. Can you share some advice for experienced directors? For experienced directors around this? I guess be open to the fact that maybe you need to think about this. Sometimes, if we're experienced, we just assume that we do know the best way to operate. But my challenge would be just objectively think about the boardrooms that you're in, and have they become very, very businesslike? Have they become very agenda-driven, or are you taking time and allowing space to learn and, and actually hear from each other? Great. Steven, again, thank you so much for your time. That's been a really interesting conversation. I'll look forward to catching up again soon and see you next episode. Thank you. Thank you for watching this episode of Governance Bites. We have more episodes on YouTube and your favourite podcast channel where I interview directors and experts on various topics relating to boards of directors and governance. We'd love to see you back, and please like, subscribe, and share the videos and podcasts.