Episode 6 - Would we Appointment them Today?

Long-serving Directors and advisers often bring invaluable experience, deep organisational knowledge and trusted relationships. But what happens when tenure begins to outweigh contribution?

In this episode of Off the Record, Lisa Coletta and Adam Coonan explore one of governance's most uncomfortable conversations. They discuss how complacency can quietly emerge, why Boards sometimes tolerate behaviours they'd never accept from a new appointment, and how loyalty, familiarity and long-standing relationships can begin to constrain accountability.

It's a thoughtful discussion about stewardship, contribution and the importance of continuing to earn your seat at the Board table, no matter how many years you've served.

Because good governance doesn't ask how long someone has been there. It asks whether they're still adding value today.

Transcript

SPEAKER_01 0:05

Well, welcome once again to Off the Record, a podcast full of governance conversations that don't make the minutes. I'm Adam Coonan, and here with me, as always, Lisa Kaletta. We are both specialist governance consultants. Between us, we bring different lenses to governance. And in this podcast, we explore what is really driving decisions inside boardrooms. Not just the structures and frameworks, but the dynamics, tensions, and conversations that sit underneath the everything we share is drawn from working with boards, chairs, and executive teams. But these are our perspectives and do not constitute legal advice or formal governance guidance. And after this disclaimer, I'll say today's conversation is about something that almost every experience board has encountered at some point. The long-serving director or trusted advisor whose history has become so intertwined with the organization that questioning their contributions starts to feel uh harder than questioning the decision itself. And I'll admit I've seen organisations where some people can occupy these seats for 20 or 30 years. Now, fortunately, in the listed space, uh that's gone out with requirements in the listing rules for tenure and the like. So this is probably more likely to be in the non-listed space and also possibly in the listed space in organizations that are still closely held and there are still people hanging around whether on the board or not. But I guess to characterize this, Lisa, everyone speaks respectively, respectfully, respectively, respectfully about what they've contributed, but privately. People probably wonder whether they're that is those long tenured people still contributing in the way that the organization needs in the present. Um not sure what sits underneath that for you, Lisa, but let's unpack it.

SPEAKER_00 2:09

Absolutely. So yes, um for me, Adam, it starts with recognizing that tenure and contribution are not the same thing. Some of the most effective directors and advisors I've worked with have served organizations for decades. They remain curious, they prepare thoroughly, they invite challenge, they continue earning their place around the table at every meeting. But occasionally you see something quite different, and I've seen it a little bit more and more, especially in the founder-led boardroom environment. Um, and that is preparation starts slipping, board papers become optional, reading board papers becomes optional, stories replace evidence, questions are treated as criticism, and of course, over time, experience quietly somehow becomes entitlement. And sometimes these individuals that have been sitting around that table for a long time have deep personal relationships with founders or owners. They play golf together on the weekends, their families know each other, they've traveled together. And don't get me wrong, none of that's inherently inappropriate. But when these relationships become so embedded that honest conversations about contribution can no longer occur. Governance has quietly shifted. And um, I think, Adam, um those conversations can actually really be quite difficult.

SPEAKER_01 3:39

Yeah. No, I think that's right. In my estimation, it's it's that challenge of trust, which no doubt those people have built versus a potential objective view as to ongoing contribution. And and look, the conversations would be difficult or are difficult because we're human. Uh, you've taught me that, Lisa. Uh, most people don't like confronting someone who's invested years, sometimes decades, into an organization and is their friend. It's that loyalty, history, gratitude, friendship, like you said, and uh perhaps even a sense of obligation. Uh and you also hit the nail on the head saying, you know, the difficulty is all of those things can be absolutely uh genuine whilst making objective governance harder. It's it's one thing to assess the contribution of a uh a newly appointed director. It's another to have that same conversation with someone who's been, you know, part of the furniture, so to speak. Uh I think I used the conversation with you once that someone that I was working with seemed to like the old carpet that was stained and the like uh as an analogy. Um but the the rest of the board, and uh perhaps in the context of founder-led organizations, the founders, uh that rather than addressing a decline in contributions, the board or or the operations often adapt around it. Um so what are you seeing that people perhaps aren't openly talking about enough in this in this context when you see it?

SPEAKER_00 5:16

So I see a few things. Um and frankly, I think what's really being said is this we're tolerating behaviors from long-serving directors and advisors that we'd never accept from someone joining the board today. A new director who consistently hadn't read the papers, who became defensive when challenged, who dismissed alternate perspectives, who behaved as though they carried authority beyond the boardroom, would very quickly attract feedback. Yet sometimes those behaviors become accepted simply because they've just been there a long time. Um and the board, it it isn't being governed by tenure, it's being constrained by it in some of these environments I'm stepping into. Yeah, and that's the uncomfortable part, it's the uncomfortable truth because eventually the conversation stops being about governance, it becomes about protecting relationships. The equal and fair exchange quietly disappears. And I know you know me well enough to know, Adam, that the equal and fair exchange piece, especially as I've gotten older, it's a non-negotiable for me and for my clients. Equal and fair exchange. The organization continues offering trust, influence, and status, but they're receiving less and less contribution in return. Um, and I think it's one of those things where boards are really struggling, I think. Some boards and some business owners and chairs are struggling to recognize when that line's actually being crossed.

SPEAKER_01 6:48

Yeah. I mean, the loyalty thing's one thing, but it's also possibly that they don't know what they don't know. You know, what does good look like? Well, if innovation isn't coming through or the like, well, um maybe they just they're blind to it anyway. Um, because I I mean, look, I think this stuff's like the boiling frog, isn't it? It happens gradually. Um, nobody wakes up one morning and decides they're no longer going to challenge a particular director. Uh, it happens one meeting at a time or or over a period of time. One uncomfortable conversation, sure, one behavior that's overlooked. Okay, one assumption that someone else will deal with it. But before long, the standard being applied to that individual uh or individuals, depending on the circumstances, is different to everyone else. And that's where uh the corporate governance starts drifting away from uh the accountability that it's meant to be. It's it's out in this sort of ether, I don't know. But yeah, from your perspective, where does the behavioral governance piece help organizations to think differently about these types of questions?

SPEAKER_00 7:54

Yeah, look, from a behavioral governance perspective, it really asks us to separate the person from the role. So you can value someone's history, you can respect everything they've helped build, you can appreciate the years of service, and still ask whether they're contributing what the organization needs today. Um, those aren't competing ideas, they're actually part of really good stewardship. The behavioral risk isn't tenure, it's what tenure sometimes creates. Certainty instead of curiosity, influence without accountability, relationships that become difficult to separate from governance decisions because governance roles aren't recognition awards, they're not. They're stewardship responsibilities, and stewardship has to be continually renewed and not assumed. And so um, I actually think, Adam, there's a couple of different ways.

SPEAKER_01 8:51

Um Yeah, well, what are the practical ways? Um because these conversations aren't easy.

SPEAKER_00 8:56

Look, look, they're not, they're not. And it's really one question. If the person applied for the role today, knowing everything you know now, would you appoint them? I know it's a confronting question. I know it's a scary question, but it shifts the conversation away from loyalty and back to contribution. Yeah, I'd also encourage boards to look for the subtle signs, you know, there's directors sitting around that table and chairs listening today. You know, are your board papers being read? Is challenge welcomed? Are fresh perspectives genuinely considered? Or does one person's history carry more weight than the evidence in front of the board? Because healthy governance for me doesn't apply different standards based on tenure, it applies consistent standards based on stewardship. Yeah. And that creates something every board needs: accountability that's fair and rather than personal.

SPEAKER_01 9:55

Yeah. Well, look, because experience is incredibly valuable, but experience alone doesn't strengthen governance. Um, continued contribution does. And I think uh all of those people around that collective of the board uh should should have that expectation.

SPEAKER_00 10:10

Look, absolutely. And the moment relationships become more difficult to question than behaviors, the governance environment has already, in my opinion, begun to change and be compromised, to be really frank with you.

SPEAKER_01 10:23

Yes. And as you say, Lisa, and those are the conversations that often don't make the minutes. Absolutely. Thanks everyone for joining us again on Off the Record. See you next time.