Giving the Board a nudge … A Case Study: Board Dynamics and Nudge Theory

Nudge Theory: A concept in behavioural science, political theory and behavioural economics which proposes positive reinforcement and indirect suggestions as ways to influence the behaviour and decision making of groups or individuals

The popularity of Nudge Theory over the last ten years has seen it applied to areas as diverse as transport, sport, and consumer behaviour. In our experience, the fundamental applications of Nudge Theory, and the realities of chairing a board, have much in common. The principle of Board Dynamics is itself well developed. Due to the limited number of meetings and occupancy being based on experience and insight, most board management is under the radar and at the level of nudging. Put simply, management happens indirectly through suggesting, shaping, lobbying, influencing, persuading etc.

So can you really give a board ‘a nudge’?

Based on our experience you can.

Recently, a mid-sized client asked us to examine the dynamics of their own board. As part of this exercise, we wanted to see if it was possible to increase the member’s receptivity to being ‘nudged’. As much of our consulting work is with executive teams and senior professionals of larger corporates, we set out to understand whether there are any transferable lessons or methods that could shed some light on individual and collective board behaviour in the context of a smaller company. To do this, we devised a three-factor approach highlighting 21 behavioural issues the chair could discuss to enhance board dynamics. The three factors were:

  • Motivation: Taking responsibility for seven key behaviours known to drive board effectiveness
  • Expertise: Ensuring transferable skills are applied to the seven behaviours
  • Awareness and style: Addressing the seven core issues at play when people try to work together

Adopting a conventional approach to our Board Practice work, Norman Broadbent Consulting collected data on the 21 behavioural issues through interviews and observations conducted in a way commensurate with accepted, well-established board evaluation methods.

There were three significant outcomes and attention was focussed collectively on a few key behavioural issues that the board could address together. The Chair was able to use the outcomes to realign individual and overall commitment to effective board behaviours, and the application of our recommended approach was seen as proportionate, sensible and appropriate. It thereby set the agenda for future constructive ‘nudging’ by the chair.

If you would like to learn more about Board Effectiveness or have a discussion about the Consulting Services we offer at Board and C-Suite level, please do not hesitate to contact Dr Stephen Sloan and Tim Hammett for an initial confidential discussion.