Chairing the board traditionally requires strong leadership – but a board chair who bullies the top team into cowering submission can do more harm than good, and risks killing the business altogether, a consultancy has warned.
A study of 196 top UK directors on what makes a great Chair by Board performance experts, The Change Partnership, has found boardroom bullying to be endemic, with high-powered executives routinely complaining that chairs are arrogant, over-bearing and out-of-date.
The issue of boardroom bullying has been highlighted by high-profile American financier Warren Buffett, who last month issued a damning critique of the way many companies suffer from over-dominant chief executives.
A bully at the top of an organisation can encourage employees to cook the books simply to ensure they don't get shouted at, he warned.
"Imagine an operations meeting where the Directors really feel put upon by the boss and then have to walk straight into their own team meetings. It's unlikely that they'll be in a good personal space and this means that the negative behaviour will then be replicated within their own teams."
"Naturally, Chairs do sometimes need to be able to be tough with their people to drive performance but this must be done in a way that is energising and has a positive outcome.
"One executive we spoke to said of the 12 chairs that he had worked for, he could not think of anything nice to say about any of them. That is unacceptable," she added.
Research shows that bullying behaviour at any level can have a draining effect on an organisation, leading to demotivation, resentment and lower productivity.
"Where Chairs are being bullies, it is vital to have non-executive directors who are strong enough to stand up and point out the damage they are doing", Bloch suggested.
Conversely, when it is the chief executive who is being the bully, it is up to the chairman to rein him or her in."
Some specific business environments – such as a turnaround or rescue situation – do require a firm, even coercive, hand, but when such behaviour is the norm it becomes a negative, Bloch argued.
She also stressed that organisations needed to develop systems of effective, non-attributable feedback, including about the chief executive and chairman and that this can only be done effectively through external boardroom audits. Better coaching and training in how to spot and tackle bullying behaviour can also be helpful.
"It's simply not good enough for a division to be commercially successful if a bullying culture is endemic. Organisations must tackle people behaviour if it is not in line with the values of the business, concludes Bloch."