The jester in the startup board room, with Jaap Schoeman

The board is above all a social construct to serve some man-made goals. In this case, it’s there to get the most out of the long-term value creation for a company and its stakeholders.

Knowing the purpose of long term value creation vs. how we actually act on the knowledge i.e. the “doing” is in many cases not aligned. Of course, this is part of our complex and often dualistic human behavior which challenges us while simultaneously presenting opportunities for improvement. It is part of my curiosity to shine a brief light on some of these knowing-doing gaps and contribute to adding value to the board and its members. Therefore, let me introduce you to “the jester” in the boardroom.

The jester (in the boardroom)

By nature, leaders don’t tend to be great at (organizing) self-reflection. A skill which not only prevents them from making mistakes but makes them better leaders. Medieval kings had their own solution to this: the jester. Although it was not always a safe environment for the jester, his contribution was generally valued. Next to the most well-known role of entertainer, there are fifteen more roles of the jester defined to increase self-reflectiveness. One of those roles is  being the observer and supervisor. From a helicopter view, the jester could assess the situation in an impartial and crystal clear manner. ¹

An example in modern times has been Paul Birch who was appointed corporate jester in 1994 at British Airways. He aided the CEO by being critical about his leadership style however he was eventually fired (luckily not exiled or executed like in the past) by the new CEO. 

In the light of corporate blindness, implicit and explicit assumptions, and the blind spots within the boardroom, there should always be at least one person who asks the difficult questions with the risk of being misunderstood or undervalued. Let it be a jester.

The knowing–doing gap 

From a knowing-doing gap perspective, it is both striking and fascinating that we already know a lot about how a boardroom should function and what happens in practice.

Here is an example from many that have passed by:

• It is estimated that 70% – 80% of the board members add negative value which is a pretty shameful statistic, especially being a member of a board oneself.

There is still too little thought and action on improving the added value of board members.

This requires systemic and personal reflection about what the board is doing as a collective and the individual contribution of board members. 

For example, take a look at the following four areas of board failure ² as an aid to assess your individual and board’s contribution: 

1. Identifying, assessing and managing risks
2. Strategy
3. Non-executive to executive relations 
4. Integrity

• Diversity pays off in boardrooms and companies as to resemble the make-up of the company’s stakeholders more closely. 

By far we do not pay enough attention to diversity and inclusion or the taking in of a broad range of different experiences, perspectives, cultural and social backgrounds, personalities, skill sets and mindsets. 

So therefore, let’s assess and examine the composition and diversity of the board. 

• Companies are successful in building relationships with people and stakeholders. The relationship building tends to get lost the higher up in the organization. The base for relationships is mutual trust as a key driver within the board and with the company. 

Trust and relationship building takes time and is often not valued enough.

We must bring more focus on soft skills and controls like behavior , culture, intuition, ambitions and values. Behavior is essentially determined by the direct social context. It is a big gain to become more conscious of building relationships, with which comes trust inside and outside of the company.

• Long term value creation always takes place in the context of unpredictable markets and society, such as high inflation, supply chain challenges, a tight labor market and consumer sentiment volatility. There are many variances along the way which make it a continuous transformative process. The unpredictability does not apply to large themes such as sustainability, climate change and emerging technologies which should inevitably be taken into account for future life on this planet. 

Still those last-mentioned themes are too often not put on the table and certainly not at the same level of importance as financial results and shareholder value. ³

Clearance and alignment of what the company stands for, along which principles we live by and the purpose of the company is of considerable importance in the long-term strategy and its relationship with the large themes. It is our duty as a board and as individual board members  to stay on track and ride the waves as the conscience of the company. Thus guarding the DNA and soul of the company.

Reflections

I invite the independent board member to take a (circumstantial) role as the jester in the boardroom by speaking their mind with positive intentions and humor. Through this role, they can reflect on the knowing – doing gap and other issues. The independent board member is designated to represent all stakeholders with no other interest. In this role, they have a broad experience and view as well as a natural curiosity and ability to make connections. I wish you all the courageousness with both an appropriate distance and closeness to the subject matter. It is an honor to serve as a board member. Get on with it and enjoy the ride!