Delivering Bad News to Your Board

Whether it’s a financial setback, the departure of a key leader, a cybersecurity breach or something else, mishandling the delivery of bad news can erode your board’s trust in your leadership. But when navigated well, this process can strengthen the relationship and ensure that directors serve as your candid, engaged, and strategic partners. Challenge #1: When to deliver bad news Leaders often receive bad news as a situation is unfolding, which creates a dilemma: Do you share the information you have with the board as soon as possible? You might want to avoid creating unnecessary alarm, especially while you’re searching for a solution. But if you wait too long, the issue might snowball or the board could feel as if you deceived them. Striking the right timing requires careful judgment about the problem’s severity, immediacy, and relevance. Recommendations: Disclose bad news quickly. Withholding negative updates and surprising your board is a surefire way to lose their trust and respect. You’re also missing out on the opportunity to tap into your directors’ knowledge and value. Bringing an issue to your board as early as possible allows them to contribute and surface their concerns before you’ve invested time and resources into a solution they do not support. Share in a one-on-one setting first. Meet one-on-one or send a heads-up message to each individual previewing the issue. In these one-on-one settings, directors can be more candid and you can give them your full attention. If you get the news right before a board meeting, you’ll still want to provide some type of notice. You can grab board members before they enter the conference room or send an email that says something like: I haven’t had a chance to talk to you about something. There is a problem I’m going to mention in this meeting. I just didn’t want you to be surprised when I brought it up. Challenge #2: How to deliver bad news Many executives waste time rehashing how the problem happened or over-explaining technical details. Instead, focus on the consequences and the path forward. Recommendations: Emphasize impact. If you don’t provide a clear description of the short and long-term consequences of the problem, board members could either dismiss the issue as unimportant or overreact to the news. You also want to be transparent about what you don’t yet know and explain how you will find the answers to these lingering questions. Be concise and leave room for dialogue. Talking too much can make you seem defensive or disorganized, and it eats up time that could otherwise be used to seek input based on your directors’ expertise. As a general rule, your management team should never spend more than 50% of any board meeting presenting. If you’ve shared the negative news individually with directors, use the larger group meeting to discuss new developments, debate next steps, and assess the effectiveness of any responses that you’ve already implemented. Adapt your communication style. We often relay information in the way we would like to receive it. However, any group, including your board, is composed of people who have different preferences and ways of processing information. To make sure that your update is properly understood and that you’re receiving the guidance you need, you must tailor your approach. You can often identify a person’s preferred communication style by listening to how they try to influence others: If they use data and facts, respond with logical persuasion. If they reference values or mission, try appealing to shared goals. If they request your opinion often, do the same. (“What would you do?”) If they often plainly request what they want, tell them exactly what you need from them. Challenge #3: Navigating your directors’ reactions Even if you’ve followed all the above advice, high-pressure moments can be emotional. Board members may express frustration, blame, or even panic. In these moments, getting defensive will only escalate tensions. Ultimately, you want to walk out of the room with a plan to move forward and with a strengthened relationship with the board. Recommendations: Prepare for your critics’ concerns. Consider which directors are likely to offer their support and which might be skeptical. Then ask yourself why your supporters back you, and why objectors question your stewardship. Understanding these perspectives can help you prepare to answer the tough questions. Create a list of these questions that are likely to come up and enter conversations ready to answer them—or, better yet, raise them yourself. Road test these ideas with your chair or lead director since it will be their responsibility to help you move the conversation forward and keep it productive. Pause and validate concerns before responding. Your board should feel heard, not managed. This entails letting people react in an authentic way, even if it’s not how you hoped they would. If a board member responds to bad news with a concern: Absorb what was shared. Don’t immediately jump into defending your choices and actions. Acknowledge what you heard, even repeating back your understanding for confirmation you processed their thoughts accurately. Ask clarifying questions to further delve into the subject and push the conversation forward. Go Deeper 5 Ways Executives Can Manage Conflict with the Board by Sabina Nawaz HBR.org, April 15, 2024 (11-minute read) 5 Moments That Make or Break a CEO-Board Chair Relationship by George Anderson, James M. Citrin, Cassandra Frangos and Zachary Morfín HBR.org, August 23, 2024 (15-minute read) Best of IdeaCast: Behaviors of Successful CEOs Guest: Elena Botelho HBR IdeaCast, December 26, 2023 (30-minute listen) Credits Expert advice courtesy of Christine Barton (BCG managing director and senior partner and CEO Advisory North America lead), Chris Fenning (communications coach and author of The First Minute: How to Start Conversations That Get Results), Claudio Fernández-Aráoz (Harvard Business School lecturer and author of It’s Not the How or the What but the Who), Sabina Nawaz (CEO coach & adviser and author of You’re The Boss), Timothy Rowley (professor of strategy and governance at the University of Toronto Rotman School of Management and visiting professor INSEAD France)

Delivering Bad News to Your Board

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