The disruptive power of a dysfunctional direcror: redirecting, deselecting, or not recruiting troublesome directors in the first place have become far more important tasks for the board.

• Author: Carey, Dennis
• Position: BOARD DYNAMICS

ALMOST ALL DIRECTORS look promising before they enter the boardroom, but not all perform equally well once inside. In our experience, as many as half of Fortune 500 companies have one or two dysfunctional directors. Not infrequently, an intimidated management ends up kowtowing, fine-tuning its presentations in the boardroom to anticipate the difficult director's reactions or consulting with the director in time-consuming ways accorded to no others. It becomes a drain for everyone involved--except the dysfunctional director.

Let us be clear. We are not critical of directors who disagree with management strategy or voice alternative directions. We are not even talking about hostile directors sometimes forced onto the board by a hedge fund trying to take control of a company or about partisan factions that have formed for whatever reason. Dysfunctional directors have their own modus operandi. Some see themselves as the smartest person in the room, others seek recognition, and still others are frustrated would-be CEOs.

Whatever their personal motives, they tend to micromanage or take boardroom discussions down dark alleys. We have seen a director interrupt the first five minutes of a CEO's boardroom presentation and sour the mood of both board and management for the remainder of the day. The result is to impair, even negate, a board's capacity to lead the firm. As in any group, a dysfunctional member can sabotage the entire team.

A damaging insurgency

The disruptive power of a dysfunctional director and the need for careful screening are well illustrated at a manufacturing company, one of America's Fortune 50 blue-chip companies, where the corner office had suddenly become vacant. A chief executive had unexpectedly decamped to another firm, and the directors quickly concluded that no executive within the firm was quite ready for prime time. One of the directors, however, thought he himself would be a worthr candidate, even though he lacked relevant executive experience. The manufacturing company board had elected him interim

chief executive and chair for the company while it searched for an outsider, and that had only whetted his appetite.

Although the board made clear at the outset of the search that it was looking for a specific set of skills that the interim chief executive did not possess, the aspirant approached the lead director, who was also chair of the search committee. The lead director rebuffed the query, since the interested...