Beyond Good Governance: What Makes a Board Truly Effective? #131

Welcome to the Proteus Leader Show, a podcast for forward-looking leaders driving transformation in their organizations, within their teams, or for themselves. Your host today is a senior leader at Proteus International, a firm that partners with companies around the world to make true transformation easier through change consulting, leadership development, and executive coaching. If you're looking for fresh perspectives and practical insights you can take back to work today, you're in the right place. Enjoy the episode.

A board can be full of highly accomplished people and still make a poor decision. Why? Because board effectiveness is not only about who is in the room. It is about what gets discussed, what goes unchallenged, and whether the board can act decisively when the facts are incomplete and the stakes are high. So what does it really take to make a board work? Welcome to the Proteus Leadership Show. I'm your host, Marie Holleef. Today, we're exploring how boards can govern, decide, and lead effectively in a world of growing complexity and constant change. My guest is Patrick Dune, an experienced chair, board advisor, social entrepreneur, and author of the award-winning book, Boards. Through Board Delta, Patrick advises boards around the world on how to improve their performance. His career has included senior investment and leadership roles at 3i Group alongside chair and board positions across business, education, and the social enterprise sector. Patrick has just published the 3rd edition of Boards, updated for a time when directors are navigating rapid technological change, geopolitical uncertainty, growing stakeholder expectations, and increasingly difficult decisions. I'm especially pleased to welcome Patrick back to the podcast. In his previous appearance, he joined Rebecca Robbins to discuss 5 Generations at Work. So if you want to refer to that, you'll see the link in the show notes. But today we're focusing on the practical realities of the boardroom, the conversations, relationships, and behaviors that determine whether a board simply fulfills its duties or genuinely adds value. Welcome to the Proteus Leaders Show, Patrick.

Great to be here. Thank you, Marie.

Such a pleasure to have you. Now, why did the world need a 3rd edition of Boards?

That's a question I ask myself. The second edition was really popular, but that was 5 years ago, and so much has changed. And I didn't want to write something that was just fiddling around with what was already there. So I made a bold decision to start with, which was to take out 11 of the dilemmas that are in the previous edition and put them free on the website, my boredelta.com website, to create space to talk about some new things. And also to include some new dilemmas. So there's obviously been a huge difference in the way that boards work in the last five years. Very many different types of board meetings now. The way decision making has changed. The way we do risk needs to change. So I wanted to say some things about these, and then of course the technological changes that we have had and are only. Starting with AI, I wanted to talk about those. And then I've learned a lot over the last 5 years. So there was some stuff I'd picked up from other people I wanted to sort of weave in and comment on. So that's really the why. And I wanted to, you know, say some new things. And I had some new dilemmas, which I've been helping people with over the last 5 years that I thought would be interesting to other people. Yeah.

And we'll talk about some of those, but thank you for sharing all your learnings and making those previous dilemmas available to all of us, because I think problems are becoming more complex with the technological change and the pace of change too. Now, in this context, what do you think separates a board that is well governed from a board that is genuinely effective?

Yeah, so I think the role of the board is to, you know, assuming the vision and purpose of the organization are clear, is to ensure that we've got the right strategy, the right resources, and the right governance. Not just the right governance, but we've got the right strategy and the right resources. And to achieve that, I think for me what's differentiated good boards from dysfunctional boards And my whole journey into the board kind of space was really because early on in my career, I attended a really dysfunctional board meeting of a portfolio company. And that was the catalyst for me thinking, what makes a good board? What makes a good board member? How should the board work with the executive? And so on. And I'm a dyslexic mathematician, so I love triangles. And I drew this triangle in that meeting, and it had purpose, people, and process. In the corners.

The 3 Ps.

The 3 Ps. And the highly effective boards, I think, have clarity of purpose, are aligned behind that purpose. So it's not just something written down on paper, people really feel aligned behind it. They have the right people and they're working together in the right way, and they have good underpinning process that enables them to achieve all of those things. I think the problem, if you think it's only about governance, is that gets you into what I call a minimizing mindset and a risk-focused mindset, and you don't maximize the potential of the organization and the people within it and around it. So I think it's that purpose, people, process, and what I describe as— I suppose being a mathematician again— a maximizing mindset.

Yes.

So you come with that sense of what we're about, what our role is to maximize the potential of this organization, this idea, this group of people. They're the main things. You'd have other things as well which enable you to do that. A good board is really good at encouraging different ideas, diversity of thought, but it's also good at managing conflict because Because if you encourage diversity of thought, you're going to get conflict, conflicting ideas. So you can't just sort of open the bottle and let it all fizz out. You have to be— and good chairs are really good at this— at managing conversations so that it's brilliant to disagree, but then you must reach a point of alignment and be all behind what you've decided to do.

Yes. And as I'm listening to you, the word that is coming to mind is Facilitation, because this is such a knot and brilliant chairs like you do this. So what's the secret?

I don't know that it's a secret, but the things I found to work really well are you've really got to know your board, the board members and the executive, some of whom, usually the CEO and CFO, might be on the board. The others don't, because the better you know people, The more you're able to discern their changes in mood, you can spot whether they feel uncomfortable. I'm from an Irish immigrant family born in Liverpool, and my gran, who didn't have any education but was an incredibly clever woman, said to me as a little boy, it's really important, Patrick, to listen to what people say, but it's more important to listen to what they think. I think a roll of a chair is really to work hard to try and understand what people are thinking and feeling as opposed to what they might be saying. Hopefully they're the same, but often they're not. And the tip I would have at the end of a board meeting— so where I'm chair, we do this— we have 15 minutes at the end of every board meeting to reflect on how we did.

Oh, wow.

So did we rush that decision? Did we take too long over that? How did we think we left the management feeling? And I'll get feedback from the executive as well about how they left the board feeling. Because increasing your self-awareness for everybody is important because, you know, there's a well-proven link between higher self-awareness and higher performance, collectively and individually.

Absolutely.

And that then enables you also to give feedback to people and get feedback. If you're a chair, I crave for feedback, genuine feedback about how I could do my role better. And so I think good chairs do those things and they put the work in. You know, they don't just pull up to a board meeting and, hi everyone, off we go. They've done a lot of thought beforehand about who will make the best intervention on a point, who might have a different point of view.

Mm-hmm.

Those sort of things.

So it's back to what you said at the beginning. You need to know your board members. You need to read the room. It requires emotional intelligence, listening. It's a lot of the coaching skills, you know, as a coach. It feels that coaching mindset is important for the chair and probably the other board members, but being able to reflect on what just happened also requires humility. I think.

You need a lot of humility if you're going to chair anything. It doesn't mean that you don't have any self-confidence, but I think humility is a wonderful thing to learn to be better. The moment you think you've got something completely nailed, you're at your most vulnerable, I think. Unless you're incompetent, then you're vulnerable too. But you should never let success get to your head. Dangerous.

Love that. We're still learning. And I find that motivating in some ways.

Yeah, yeah.

Now boards increasingly have to make important decisions without complete information, you know, whether the issue is AI, geopolitical, climate, cyber, yeah, you name it. So what helps a board balance that thoughtful scrutiny we talked about the risk aspect with the need to act at speed because it's also an opportunity. So not just seeing the risks, but also the opportunities.

Yeah. So I think being actively open-minded helps a huge amount. So what's the difference between an open-minded person and an actively open-minded person, you might say? Well, to me, an open-minded person is prepared to change their view in the light of new information.

Yep.

An actively open-minded person wants to go and get all the information they possibly can to inform their decisions. So they're not passive.

Again, they're asking questions, right?

They're asking questions. And actually outside the board meeting, they're visiting different places, they're seeing suppliers, they're really informing themselves. I find if you're interviewing someone who wants to be a non-executive, or a trustee in a charity, usually when that person arrives that morning, they're the world expert on your website. Not necessarily the company, but they've trawled through your website, and that's good that they've put that work in, and that's nice. However, the person that impresses more is the person who's looked at competitor websites, supply chain websites, what the regulator's saying. They view the company in its solar system. They're not just looking at the planet and saying, isn't that beautiful? Or that's a spotty bit. There's 2 mountains. Yeah, they're understanding gravitational forces around that organization. They are very clear about what are facts and what are interpretations. So when you get any board paper, you find that there's assertions made in board papers. Sometimes they're backed up with hard evidence. Sometimes it's just an assertion. We have no competition. Our product will be the fastest. It'll be the cheapest. It'll be the best. Who says? I find that really good board members ask those inquiring questions. The Welcome Gallery in London has got a fantastic cafe, and for many years— they've taken it down now, which I'm disappointed about— but for many years it had over the door, for the incurably curious. Lovely. I thought that described me well.

But you know, if I'm not mistaken, Einstein said, I'm not intelligent, I'm just incredibly curious. So I think curiosity is really highly connected to intelligence.

It is. And you have to moderate that. If you're enthusiastic and incurably curious, you have to reach a decision at some point.

Yes.

You know, there is an amount of reasonable knowledge you need to make. I think the other thing is, if you think about the qualities you need. You have to have good judgment. It's interesting if you watch people with the same information take very different decisions.

Mm-hmm.

And sometimes that's because collectively we haven't really agreed what our risk appetites are. And you'll notice I don't say risk appetite because I think, are we a 6 or are we a 7, is pointless. But what is our appetite for financial risk? What is our appetite for business risk? What is our appetite for all sorts of things? Because if we have a high appetite for business risk, then we need to be in an extremely strong financial position. If we are in a weak financial position, then maybe we can't have such a high appetite for business risk, market risk, or whatever. Because if you look at the companies that get killed, you know, usually one of those things is out of kilter. They've taken high business risk and high financial risk at the same time.

And I think this is an important point you're talking about is the alignment of the board on risk appetite or criteria that will be used to make decisions because people will come from different backgrounds and personalities, but you need to make the decision that is right for that company with that purpose. In the context.

Yeah.

And one of the new things in the new edition is I'm basically suggesting that we all need to think about how we do risk. And I think I've been a fan for a long time of combined audit and risk committees, but I've been shifting that view because I think one of the reasons is the composition of audit risk committees tends to be financially oriented people of a certain age. And that's not a diverse group of thinkers by definition. And if you're trying to think about risk at the same time you're thinking about audit and financial control and those other things, you maybe don't put enough weight on strategic risk. You're putting more weight on financial risk. And so I'm an advocate of having a diverse group of people on a risk committee if you do have it separate, and diverse In all sorts of meanings of that, you know, character, age, whatever, different functional backgrounds, functional roots.

Makes sense.

Hi everyone, it's Marie-Helene, host of the Proteus Leader Show and CEO of Proteus International. I'm delighted to share that the Proteus Leader Show has been featured in the 2026 edition of the Top 40 Change Management Podcasts. And we're honored to be ranked number 20. For those who may be new to us, Proteus International is an American-based company providing transformation, coaching, and leadership development services globally. Through this podcast, our goal is to help leaders navigate change, lead with clarity, and create true transformation in their organizations and their lives. You can find the link to the top 40 list in the show notes. And while you're there, please make sure to follow the podcast so you'll be notified when new episodes are released. You can also help more people discover The Proteus Leader Show by leaving us a review and sharing the episodes you've enjoyed with your colleagues. Thank you for listening. Thank you for your support. And here's to creating the leadership you truly want.

Now, as we're talking about 3rd edition, I love for our listeners to get a sneak peek into one of the dilemmas from that edition, maybe the map-to-sat-nav dilemma as an example, or anyone you'd like.

Yeah, that, that's quite a good one, and already it's proving very popular. I get a lot of messages about that and people asking about it. So map-to-sat-nav is really a simple dilemma to say, but a harder one to crack. So essentially, this is all about The shift from a maps world, which I describe as the world of very detailed annual budgets, very detailed 5-year strategic plans, kind of more rigid planning, less flexible planning, to a world which is more like the sat nav or GPS in our cars, where we're making decisions closer to the decision junctions. That's the connection. And this is a world where we have dynamic budgeting. We're using strategic frameworks with parameters around them. So yes, we have an annual budget at the beginning of the year, but as we go through the year, we've already predetermined some things that we will do if we exceed our sales forecast, we generate more income, more cash. What are we going to do? Are we going to bank half of it and build our resilience, our financial reserves, or are we going to accelerate investment in some things? A brilliant example of that in practice was the way that Zoom managed the COVID crisis. They used dynamic budgeting very effectively to invest, you know, at the right rate as they went. When they saw things improving very quickly, they responded. And that might be not investing in some things, but putting more investment in others. So the Maps to Saturn dilemma is a board scene. Where a company has been using dynamic budgeting reasonably effectively through the COVID years. Now its chief audit risk is quite keen for them to go back to the way things were done before. And there's one of the non-executives who's a pretty feisty person who thinks, you know, no, we absolutely should be piling forward with this and There's an argument between the progressive non-exec and the traditional non-exec, and the CFO is caught in the middle of this.

Mm-hmm.

And of course, not all boards have the mindset to cope with a more dynamic kind of way of doing things. For some non-executives, it's been easy to judge the management on whether they're meeting budget or not, or whether they're achieving the strategic milestones or not. The world we're living in now, whatever budget we set today, you can be sure over the next year there will be things that knock that away. And so the ability to have a plan, but for that plan to have inbuilt capability to adapt as we go.

Yeah.

And to have pre-decided, because we can predict some things, we will have more money or less money. The reasons why we have more money or less money might vary a lot, but if we have more money, what are we going to do?

Yes.

What are we going to do? We can probably decide that in outline and then confirm. It makes us more agile if we do that.

What are the levers, right? Scenario planning. That makes me think about that.

So, I'm seeing, and it's another thing I've written more about in the new edition, I'm seeing more demand from people to do simulations.

Yes.

So to simulate a big decision ahead of having to make it. And it's interesting, if you look at the cyber issue at the moment, a lot of boards have spent a lot of time, massive amounts of time, on how do we protect ourselves from having a cyber incident. Less boards have simulated the meeting they will have an hour after you've had one, through the actual detailed decisions that you will need to take. Now, the eventual circumstance, if it happens— and hopefully it won't— if it happens to you, will be different.

Mm-hmm.

But the experiences you have through simulating strengthen the team's ability to deal with it when they get there. They're usually better. They always think of things they hadn't thought about in their crisis plan, in their thing beyond it. You discover who's good in a crisis.

Yes.

And maybe sometimes you're thinking, actually, if we do have to go through that, we probably need another board member to help us navigate through that.

Wow, Patrick, that's so aligned with the conversation I had with Vikash Chawla, who is an expert in cybersecurity. And his whole point was, it's not whether you're going to have a cyberattack, it's when you're going to have it. And you need to invest time in the Preparation for that attack.

Yeah, absolutely.

Now, for a chair, a current director, or someone aspiring to their first board role, you know, what are 3 practical actions they could take over the next 30 days to improve the way they prepare, contribute, or make decisions? Because this is what we love leaving our listeners with, some practical tips.

Yeah. So there's a section in the book called Getting in the Zone.

Okay.

And this is about— I was thinking about elite performers in other fields. So for example, Usain Bolt, the famous Olympic athlete, Bruce Springsteen, who I'm a big fan of. And you can take any elite performer, the really top people, they have the knowledge, they have the awareness, the rest of it. But before they go on the field, on the pitch, on the stage, they have a routine. They do certain things which help get them in the zone so that they can deliver the best performance. So Bruce Springsteen, for example, 3,500 concerts he's performed with his band.

Wow.

He knows the words, he knows the songs, but still he does that. And you say, well, why is he doing that? And he jokes now that given his age, it might be the last one and he wants it to be the best. So he really wants every concert to be the best he's ever done. And Usain Bolt similarly, amazing attention to detail just before the race. And I was thinking, do we do that as board members? Do we really prepare in those final moments beforehand in that way to get in the zone? And I started to experiment on ways of doing that. And so I've written about some of that. So I think getting in the zone, that's really fundamental. Everybody can do that.

Now, can I ask Patrick, because you make me curious, what's your way to get in the zone?

So I like to be there early. I like to find a quiet space.

Yep.

And my phone then goes into my bag. Unless a family member is dangerously ill or something, my phone is in my bag. And then I think hard about the meeting. What's the agenda? Where I'm chair, I'm reminding myself who I think would be best to start on an issue. I remind myself on each of the decision items, What are the 3 most important things about this decision? And I remember that, not so that I can make those points, but so that if they're not made, I will. But also, I need to make sure that we spend enough time on those topics in the meeting. Then I think about my objectives for the meeting, which might be, yes, we really want to take these decisions, or it might be, I really want to strengthen my relationship with Marie today. That's a legitimate objective. Or, I really want to bring out in Peter, who's a bit introverted, I really want to actually help him make his points because he struggled a bit at the last meeting, but he's brilliant. He's just a little bit introverted. So, I might have objectives which are around, you know, the business that we're doing.

Yeah.

And there might be objectives about the board's effectiveness and building that. So I think that's important. Every board meeting, you should strengthen the relationships you have with the people who are there, in my business. So where do I think I need to do that and how? I then, I sing a song, which is quite personal to me. So, you know, people might have their own song, but it's that song about, I've got sunshine on a cloudy day, when it's cold outside, I've got the month of May. And the reason I sing that is it's deeply personal because of a terrible incident that happened to me as a child. But it's all about optimism in a difficult moment. And it's about no matter what's going on, I will be positive. Huge. And I think there are times in board meetings where we're taking difficult decisions, and we have to take those decisions in the belief that we are doing the best thing for the organization. That's what our ultimate responsibility is. And we have to do it positively. So even if it's a difficult thing, We have to do that together in a positive way, and we have to leave the meeting feeling it's going to be uncomfortable implementing that decision for the management, but we are doing the right thing, and we're all behind the management, and we're all as board members, you know, in whatever way that we can and is appropriate, providing the support that they need. So if they need a follow-up conversation about what might be the best way to communicate that, Or how can we enlist the support of a person to help us or whatever? We do that.

Thank you so much for sharing how you're getting in the zone. I'm fascinated by it. So that's number 1.

Number 1.

As a practical step.

Number 2, and I'll be briefer on the others. The second one I think is going in with the right relationships. So I will tend to ring board members often. in that time between them getting the papers and the meeting.

Ah.

And I will be, you know, what do you think of the board papers? What's most important for you? What do you feel most strongly about? That way, at least I'm going in with some intelligence about what they're thinking, where they're feeling, where they are. And then I can actually, maybe if someone has been introverted, I can say, well, Marie, you know, when we were chatting a few days ago, you made a brilliant point about this. I'd really like you to share that.

Yeah.

And then if you were slightly introverted, then that's an invitation. And then the third thing is around self-awareness. So watching people do this really well, they're very aware of the impact they're having on others with the words that they use. So during a meeting, when you see people making the same point 3 times, you have to wonder, Are they not noticing that people didn't get it? Maybe they are, and that's why they're trying to do it again. But if they're using essentially the same words, they're just repeating something which doesn't work. And so you need to help them and give them feedback afterwards or help them in the moment. So, you know, someone might be saying something and I'm not quite sure what they mean. I would say, I'm not quite sure what you mean. John, actually, explain that again. I may be being a bit thick, but kind of just talk me through that. I didn't do that. So don't let someone get into a spiral.

And so you have to be really present to do this in the moment.

And I use body language a lot, so I might not say anything. I might just use the finger switch or something to invite someone.

Or eye contact.

Or eye contact's fantastic. Yeah. Particularly with people who are anxious. Or uncomfortable.

Yeah. Thank you so much for such a thoughtful and practical conversation. I can see that even what you just said, it could be super effective in a board, but also in any meeting, really. Yeah. You know, and sometimes the chair is not nominated, but you can play that role. You can be a leader in that meeting and make it effective, make sure that everybody's heard. So one of the ideas I'm taking away is that effective boards are not defined by perfect information and reaching easy agreement, but they are defined by the quality of the questions, the clarity of the roles, the quality of the chairs, the willingness to challenge constructively, and the ability to make sound decisions together.

Yeah.

And when the way forward is uncertain, when it's challenged, I think the getting in the zone element is important to have that positive outlook and be ready for the meeting. Now, the 3rd edition of Boards, I believe, offers both experienced and aspiring directors an opportunity to reflect on how board work is changing, and on the behaviors and practices that continue to matter, regardless of the external environment. Highly recommend it. I really appreciate that you came back to the Produce Leaders Show, sharing your experience with us, Patrick.

A real pleasure.

And to learn more about our work helping organizations transform, strengthen their leaders and board leaders, move forward their hopeful future, visit proteus-international.com. Thank you for tuning in. And until next time, here's to creating the boards and leadership you truly want. Thank you, Patrick.

Thank you. Thanks for listening to the Proteus Leader Show. We hope you're leaving with ideas you can put to use on your team and your organization. Or in your own career. To learn more about how we support true transformation through change consulting, leadership development, and executive coaching, visit us at proteus-international.com. Until next time.