Episode 4 - The Record and the Reality

Board decisions are recorded in the minutes. But what about everything that shaped the decision before it got there?

In this episode of Off the Record, Adam Coonan and Lisa Coletta explore the gap between what is formally recorded and what is actually experienced inside the Boardroom.

They discuss the behavioural dynamics that influence decision-making, including power, influence, challenge, silence, confidence, culture and the subtle signals that often shape outcomes long before a resolution is passed.

Why do some voices carry more weight than others? What does silence really mean in a Boardroom? And how can two Boards with similar governance structures produce vastly different decision-making outcomes?

This conversation explores the human dynamics behind governance and why some of the most important influences on Board decisions never make the minutes.

Transcript

0:06

Well, hello everyone and welcome once again to Off the Record, a podcast full of governance conversations that don't make the minutes. I'm Adam Coonan, and as always, I am here with uh my friend and colleague Lisa Galletta. We are both specialist governance consultants and between us we bring different lenses to the governance conversation. In this podcast, we explore what is really driving decisions inside boardrooms, not just the structures and frameworks, but the dynamics, tensions, and conversations sitting underneath them. Everything we share is drawn from our own experience working with boards and chairs and their executive teams. But it's important to say that these are our perspectives only and that they do not constitute legal advice or formal governance. So, Lisa, with that out of the way, uh today's conversation is about something that every experienced director has probably felt at some point. That moment where the decision recorded in the minutes doesn't quite reflect everything that actually shaped it in the room. And I'll admit I've read minutes back before and thought well, that's technically accurate, but it doesn't quite capture the 45 minutes of circling before someone changed their mind after the coffee break and all of that type of stuff. Um so in this context, the document may be legally sound, but the experience was rather more human. Um what sits underneath that for you? Oh look, I think there's a number of things that sit beneath the reality um of governance experienced by humans, Adam. Um, and as you know, as humans, all of us bring emotion, hierarchy, fear, confidence, bias, personality, and let's face it, power dynamics as well into every boardroom. Um like you say, they're not my human, or they are my human. They are my human, they're not my human. The human, the human. Look, people don't leave those things at the door when they walk into a meeting. They bring their relationship with authority, previous experience of challenged confidence levels and personal history into every room they walk into, whether anyone explicitly knows or acknowledges it or not. Um, but the minutes themselves are never designed to capture any of that. They capture the decision, as you said, not the hesitation, not the silence, not the dynamics that shape how the decision was actually formed. And I think that's where a lot of this disconnect really sits, because what's formally recorded and what was actually experienced can sometimes be two very, very different things. So when you think about those con in that context, Adam, you know, why do you think the two realities, you know, we've traditionally separated those two realities? Well, yeah, I mean, I tradition is is the answer, isn't it, in a sense. I mean, part of it is practical. The minutes are intended to create a clear and defensible record of decisions and and and the process involved to get their their legal construct in a sense. They're not designed to become psychological transcripts of the room. And uh realistically, imagine if they were. Oh gosh, oh gosh, oh gosh. Yeah, so so you can imagine that this this you wouldn't be writing, you know, the chair open with item 4b, one direct director appeared to fall asleep, and the other two looked at each other as if, you know, that sort of it did it's it's not going to go into that that sort of detail, and and nor should it. But if it were to go into anything close to, I guess what we might call the the human or psychological psychological, it would be a very different document. Um but it has to be acknowledged the tension that is, the behavioral dynamics still uh shape the outcomes, whether that's formally captured or not. Um, and that means that boards can technically follow process while still operating in an environment where challenge is constrained and uh influence is uneven or or certain voices carry disproportionate weights. Have we spoken about that one before, the the disproportionate weight? Uh I'm not sure whether we've released that one yet, have we, Lisa? But yeah, there's there's the disproportionate weight that that um uh comes with different roles uh on boards and in management and in um it's a good topic if we haven't done it yet. Um definitely is. But in any event, you spend a lot of time working in those environments with clients. And uh what are you seeing that people are perhaps not openly talking about enough? Oh look, there's a there's a lot about um, there's a lot there. I what I do see quite consistently is that people often feel the dynamics before they can even articulate them. So they feel when someone doesn't feel so, you know, or something or someone doesn't feel safe to challenge in that room. Um they can feel it when a dominant person changes the energy in the room, and they also can feel it, and I know I can feel it when people are out outwardly nodding and aligning while internally remaining really uncomfortable with where the decision has landed. And the head nodders, the head nodders, yeah, the head nodders, yeah. But you know, none of that appears in the minutes, and it's not because it doesn't matter, but it's because the governance frameworks were never originally designed to measure the behavioral dynamics in that way, and that matters because especially when it comes to silence, silence in the boardroom is not neutral. You know, people often assume that when um people are silent and we go through a decision process that well, no one objected, um you know, no one spoke up. Or silence is acquiescence. Exactly right. But silence can mean uncertainty, that can mean fear, can mean fatigue, can mean you know difference, um, or simply just not wanting to destabilize the room. And even if you transcribe every word of a board meeting perfectly, and let's face it, a lot of AI tools do write out what's actually being said and not necessarily what's being meant by what's being said, but again, that's a topic for another day, too. Um, the reality is that you would still miss most of what actually shaped the decision. Yes. And it's because so much is communicated in the pause before someone speaks, the question that never gets asked, or the glance towards the chair before someone even commits to a position, and none of that makes a transcript, but all of it, all of it, all of it influences the outcomes. So when you think about it in that context, um, you know, boards often struggle, Adam, to recognize those dynamics while they're actually happening. So, you know, think about some of those environments you've stepped into, Adam. Why do you think that happens? Well, dare I say this of because I know every governance conversation with you generally revolves around feelings. I knew feelings would eventually arrive here today. Um I just didn't realise um how quickly we'd become a governance podcast discussing emotions. But uh no, I generally I I think boards and not to be the dry one here, but I think boards struggle because governance historically focuses on um heavy structure and process. You know, the the assumption was if the framework is sound and the process is followed, then the decision making itself should also be sound. But uh I think you've taught me, if I haven't seen it myself, um human environments don't work that neatly. Um and people are making decisions under pressure or with incomplete information or through power structures that don't don't don't really make sense or or are you know stuck in a particular way. And that leads to varying levels of confidence and influence in decision making. So the behavioural layer, and I'll say it, matters far more than many governance environments historically acknowledge, uh, hence my interest. And and increasingly as the organizations become faster moving and more complex, I think those uh those things or those dynamics become harder to ignore. Um so my question, given you're in this every day, how how does that change the way we think about governance itself? Look, for me, it's where that behavioral governance starts to become important as a discipline. Uh, and it's not because that behavioral layer is new by any means, but because people are finally creating language around dynamic, you know, around these dynamics that practitioners and you know, directors and chairs have been experiencing inside boardrooms for decades. Um, because governance, it's never really been purely structural. I know we try to make it structural, but it's actually always been behavioral as well. And the challenge is that the behavioral dynamics often sat outside the formal governance discussion, you know, the measurement and the evaluation, even though they were shaping decisions the entire time. And that's really where I've been focusing my work over the last couple of years, really understanding how power and culture and leadership mindsets and the relational dynamics shape decision-making environments in reality and in practice. And you've heard me say it a hundred times, you know, governance doesn't fail on paper first, it fails in how it's experienced. And it is in those rooms and it is in that silence, Adam, and it's in the moments before decisions are actually made. And I think the shift for boards is starting to ask, you know, you know, the boards are starting to ask a really different kind of question now. Not just did we follow the process, but what kind of thinking environment did we actually create for ourselves? Because those two things are very, very different. And that's the reality of it. Yeah, well, like I mean, from from my perspective, you know that uh it's a little bit more nuanced. I I I I believe in I believe in the power of the documents, but I'm but I'm equally uh and I've seen time and time again uh where having a great document doesn't mean that uh the board hits the mark or the management hits the mark or whatever. I mean a a great paper, even um doesn't necessarily uh mean pay dirt, is that the right word? Or I don't know what is, it doesn't necessarily mean bingo. There, that's better. Um I think boards need to pay closer attention to the quality of inquiry inside the room. Um and that's not just what decisions are made, but how those decisions are actually reached, regardless of the quality of a board paper, regardless of the presentation, are assumptions genuinely being tested? Are alternative views explored properly? And does this environment that we're in, a board environment, this collective, allow challenge without people feeling personally exposed for raising challenge? And here's a simple test. Think about the last time somebody in the room said, I'm not sure we got this right. And I guess the follow-on from that um, or a question following on from that, how is this received? Because the answer to that question tells you an enormous amount about the quality of the governance environment. Was it accepted or or did you did they get those funny looks? Um But when you're assessing, yeah, when you're assessing uh these dynamics, Lisa, in organizations, what are the first things you look for? Oh, look, I I definitely get what you're saying. And I gotta say, I look for a few things and they show up very quickly. I don't need normally need to look very far. You know, who speaks comfortably and who doesn't? Whether challenge is genuinely welcomed or subtly discouraged, how disagreement is responded to or reacted to, and whether silence is being mistaken for alignment, because agreement and alignment are not always the same thing. And often the biggest governance risks aren't actually sitting inside the framework itself, it's actually sitting in the dynamics around how the framework is being lived in and being experienced around that boardroom table. Um, one thing I pay particular attention to is what happens after a decision is made. Is there space for reflection? Can someone still say, are we comfortable with that? Um, I find that boards that can hold an even brief moment of reflection tend to make better decisions over time because they've normalized review rather than treating it as a threat. And once you start paying attention to that layer, you begin to really understand why two boards with almost identical, identical governance structures can produce really completely different decision-making outcomes. And while some boards uh, you know, there's always a risk of re-prosecuting the past, I think re-prosecuting or having a really good look at a decision and whether you know we're still comfortable with it or not, um, is a really important um important test and a great opportunity for boards to be able to review and do that. Um, yeah, so that's where I But but as these things play with the minutes, I think it's um, Lisa, a reflection of the reality that a lot of what shapes governance decisions uh is never formally captured anywhere. It's not we've obviously focused here, you know, it doesn't appear in the minutes, but much to my uh uh uh disappointment, it may not appear in the papers. And um, you know, sometimes it doesn't even appear in a debrief if there is a debrief as as you're sort of reflecting on. But it was there and and inevitably it it mattered. Look, absolutely, and whether those dynamics are acknowledged or avoided, um, they still influence the outcome. Yeah. And uh as we say, and those are exactly the conversations that don't make the minutes. Um, so thanks everyone for joining us once again on off the record. Until next time. See you then.