The evening featured guest speakers Professor Ruth Sealy and researcher Loretto Leavy from the University of Exeter Business School and Henley Business School, who shared fresh insights from their ongoing research into board behavioural dynamics.

Expert insights on board behavioural dynamics

Professor Ruth Sealy is a Professor of Leadership at Henley Business School with 20 years of expertise in behavioural corporate governance, board composition and diversity. She has advised UK-listed firms, government bodies, regulators, and the NHS on board dynamics and strategic inclusivity. Her research, published in leading journals, has shaped governance policy and best practices. Before academia, she spent a decade as an entrepreneur before transitioning into organisational psychology and governance consultancy.

Loretto Leavy is a governance expert with 20 years of experience as a company secretary across the insurance, banking, asset management, charity and regulatory sectors. Now a PhD researcher in Leadership Studies at the University of Exeter Business School, she explores how board dynamics foster effective and inclusive governance. Alongside her research, she continues to advise boards.

Exploring board behavioural dynamics

Their research, conducted in collaboration with Chartered Governance Institute UK & Ireland, examines how behaviours influence board effectiveness. By analysing processes, leadership styles, and group dynamics, the study sheds light on the critical role of the board chair in fostering an inclusive and high-performing boardroom culture. 

Following the event, we sat down with Ruth and Loretto to explore their research and key takeaways from the Boardroom Leaders dinner.

Q: Can you share more about your ongoing research project?

Our research programme is exposing the key actions taken to bring the board together into a collective decision-making body.

We took advantage of the increased reporting in FTSE companies to analyse the similarities and differences of 50 listed boards. From our findings, we drafted the Handbook on the processes for Board Behavioural Dynamics. We then validated our findings in 14 workshops with advisors and board members of large, highly regulated boards, and participants from professional bodies and regulators. This is undergoing formal consultation until 4 April, with launch expected on 1 July.

We are currently running an interview programme to understand further the key impact of the chair, how we can move forward to explicitly and proportionally design our boards for each board’s specific circumstances, and the key outcomes to expect.

Q: What is your key finding?

A lack of policy on how to enable the board to function as a collective body. There was no established term for this or a structured guide on how to achieve it.

Q: How have you addressed this?

We have introduced the concept of Board Behavioural Dynamics, which describes the board’s ability to function effectively as a collective decision-making body. This is a key contributor to board effectiveness. To support this, we have developed a Handbook that provides a structured approach, including three key recommendations.

Q: What are these three key recommendations?

Firstly, to deliver Board Behavioural Dynamics effectively, we recommend adopting a comprehensive and structured approach. This framework is built around six key processes: Appointing, Inducting, Training & Developing, Evaluating & Acting, Succession Planning (with a focus on NEDs), Composing & Designing and Reappointing. Each process is mapped across three levels of maturity, considering contextual pressures, procedural steps, and outputs, providing a clear pathway for boards to evolve. Clarity of responsibility is crucial—the chair leads these efforts, with a recommendation that there is additional oversight from the nomination committee to ensure alignment and accountability.

Second, further review of how boards can be explicitly and proportionally designed is required. This tailoring is necessary to suit the board-specific circumstances unique to each board. 

Thirdly, we recommend a deeper exploration of emerging interpersonal practices to enhance board effectiveness: including greater introspection on relationships, an interlinking of the six processes, and a focus on outcomes.

Q: What key insights did you take away from the dinner?

Contexts are key! Although each board is unique, there was a consistent theme that contexts are influencing behavioural dynamics actions that can be taken by chairs and boards. The impact of legal, regulatory and market expectations in the Nordics was explored, particularly the consideration required where the board will only have one executive director, and the nomination committee is appointed annually with the chair usually participating but never leading the committee. This creates further structural barriers that chairs need to navigate if they are to affect behavioural dynamics within the boardroom, often requiring consultation with key internal and external stakeholders. However, this was balanced with a smaller concentration of ownership which generally allows for a greater understanding of purpose and desired outcomes. Within the Handbook, we highlight the contexts and outcomes that apply to each process, as well as the steps that can be taken to navigate overall contexts when designing boards. 

Our discussions revealed the inherent tension between conforming to codes when designing boards and adjusting composition design to board-specific contexts. We discussed that it often requires courage to explain why a code norm may not be sufficient for a board's particular circumstances, such as its operating environment, strategic needs, specific challenges and level of complexity. Dynamics are becoming increasingly important in board effectiveness discussions. We discussed the changing composition of boards and the increased challenges driving the need for greater facilitation. We are continuing to review this in further academic analysis of our Handbook data and interviews.

Q: As boards prepare for the year ahead, what key actions should they prioritise to enhance effectiveness? And how can BoardClic users, in particular, make the most of their board reviews?

For boards in general:

Step beyond the traditional focus on appointing and evaluating. Take an integrated approach to board effectiveness by recognising that the six key behavioural processes work together as an interconnected system.

Different boards require different levels of process maturity based on their context. Adopt a proportional approach to board practices based on your specific circumstances rather than treating governance codes as rigid targets.

Move beyond viewing board effectiveness solely through the lens of decision-making. Research shows that effectiveness comes equally from how boards work together as a socially complex group. Consider interpersonal relationships and the complex environment in which the board operates. 

There are a number of tools within the Handbook to assist with this.

For BoardClic users specifically:

Board performance reviews and follow-up actions are key in continued board development. 

We have also found that external board reviews are a key method to rapidly increase maturity when a board is under pressure to mature. Therefore, we would recommend embracing the personalisation capabilities the BoardClic platform offers to ensure reviews support an integrated and contextual approach, and where necessary seek external input to do so. 

A setting for meaningful discussions

This dinner was part of BoardClic’s newly launched Boardroom Leaders Network, created to foster knowledge sharing and experience exchange among chairs who serve on multiple boards. The initiative aims to promote sounder and more effective corporate governance through collective insights and collaboration.

The evening was co-hosted by Ålandsbanken and took place at the bank’s Stockholm office, providing an intimate setting for thought-provoking discussions on board dynamics and leadership.

Founded in 1919, Ålandsbanken is a Nordic bank with strong roots in the Åland Islands, Finland, and Sweden. Known for its commitment to sustainability and responsible banking, the bank has built a reputation for personalised financial services and long-term customer relationships.

For more information about the ongoing research project, visit boardbehaviouraldynamics.com or download the Handbook to learn more. To find out more about BoardClic’s Boardroom Leaders network, please reach out to us.