Conflict in the Boardroom

We’ve all worked in situations where our colleagues rub us up the wrong way.

Going into work can be a miserable experience if we know we are going to spend the whole day sat next to the office moaner spouting an endless diatribe of negativity.

Equally, if we have to work with the office know-it-all for extended periods, even the most patient of us can start to feel a little weary.

But most of the time we recognise that such tensions are a natural part of life and so we keep our head down, smile and get on with doing the best job we can.

But what happens when those at the top of a company cannot bear to work with each other?

How does any company cope when the relationship between its directors breaks down to such an extent that it threatens the very existence of the business?

The first step to solving such difficulties should be taken long before they become apparent – and that’s to plan for it.

Just like life on the shopfloor, life in the boardroom is full of tensions between people and a wise board will have planned well in advance for how to deal with internal disputes to either draw a line under them as quickly as possible, or at least stop them becoming something much worse.

So if you are setting up a business with a friend, colleague or partner, plan for the worst right from the start and get professional HR or legal help to ensure everyone knows where they stand.

There’s a good psychological reason for doing this when everyone is pulling in the same direction at the start of a company’s life: Battle lines have yet to be drawn and colleagues will largely be thinking the best of each other.

A good starting point is to get a proper shareholders agreement. This will lay out the rights and responsibilities of all shareholder directors and should set out a mechanism for managing any disagreements between them.

A good shareholders agreement will also define what should happen in the event of an irreconcilable breakdown, helping reduce the chance of lengthy legal squabbles over who gets what if the situation really cannot be saved.

If no shareholders agreement is in place, a bespoke set of articles of association can be drawn up with the support of 75 per cent of the shareholders. This can contain many of the provisions of a shareholders agreement, but care must be taken not to draw it up in a way which is unfair to any particular individual.

It’s also vital that all company directors have clear employment contracts. You wouldn’t employ a member of staff without one, so why treat directors any differently? A good contract defines an individual’s role with clarity and certainty – helping avoid the sort of disputes which can divide people – and also lays out the framework through which disputes can be resolved.

The best businesses thrive on the mix of different people and personalities which make them up. But these differences can also be a source of dispute if they are not managed properly.

Get your paperwork and systems in place from the start and that job can be made a whole lot easier.

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