Interview by Yrla van de Ven for Vuurwerk magazine.
For over 20 years, Marilieke Engbers has been talking to executive boards and supervisory boards. During her doctoral research, for which she interviewed 119 directors and supervisory directors, she was shocked by the number of things that were not being said within organisations. Annoyances, a different view on the strategy, or on how the company should be managed and monitored often remain unspoken. Also, voices from the rest of the company do not always reach the top.
Now she shares her insights with a wider audience, such as journalists and students. She wrote the books “Onder Commissarissen (Among Commissioners)” and “Eenzaam aan de top (Lonely at the Top)” to provide insight into how power works and what goes wrong at the top. She is also a lecturer in the Finance and Control programme and the MBA leading with Purpose in the executive education programme of the VU School of Business and Economics, where she teaches courses on strategy realisation, personal leadership and business ethics.
Your dissertation reveals that many important things remain unsaid in the boardroom. Why is that?
‘The rules in the boardroom are very much based on an image of humanity that isn’t realistic. These rules assume that people act rationally, while people have emotions and can become defensive when things get tense. Defensive behavior is a way of reacting when someone tries to protect themselves from criticism, threats, or uncomfortable feelings. Also, people with power, such as directors and supervisors, forget that they have power and how nerve-wracking it is for employees to talk to the top of the company. Behavior can quickly be experienced as intimidating. Body language is very important; a disapproving look can already be discouraging.'
Would it be possible to adapt the rules accordingly?
‘Yes, I think so. In that respect, I am a real action researcher; I try to figure out how the rules of the game should be formulated, so that they take human behavior into account. I get hopeful reactions from people in boardrooms who are eager for change. But it's also challenging. One of the “rules”, for example, is that supervisors often have many different side jobs, which means that they have too little time to fully understand the organisation. If you want to change that, you should no longer offer this position as a side job but make it a serious (part-time) position.’
Why is it a problem that supervisory board members often do their work in the boardroom as a 'side job'?
‘Often, they are so busy with the various jobs and functions they hold that it is very difficult to meet unexpectedly when needed, or to have enough time to discuss complex topics in detail. This lack of time can have many undesirable effects, such as the CEO making important decisions on their own without consulting the Supervisory Board, the CEO mainly communicating with the chair of the Supervisory Board, or many informal discussions taking place. As a result, decisions can be made that have not been properly discussed and internal tensions can easily arise.’
What do directors think about this?
‘I hear many directors complaining about the quality of supervision, but because they are dependent on the Supervisory Board – after all, the Supervisory Board can dismiss the board members – they are not likely to say so openly.’
Is it risky for directors and supervisory board members to speak out?
‘I have the impression that it is. It strikes me that many directors and Supervisory board members informally acknowledge my observations and concerns, but do not say publicly that the way things are going now is a problem, especially given the increasing pressure on the boardroom due to issues like the climate crisis. It is also much more difficult for them to say openly what I say, because “being difficult” does not reflect well in a world where directors and supervisory directors must be able to trust each other. Moreover, it is a small and visible world, so if you complain about the boardroom, it is easy to trace.’
The books “Among Commissioners” and “Lonely at the Top” read like novels, allowing the reader to step into the shoes of the various directors and board members in a fictional company. What do you want to convey with that?
‘We often talk very easily about other people and what they should do, based on models and theories. But life is complex and full of mundane dilemmas and subtleties. That's very difficult to capture in theory. In my books, I show that multiple people collectively create reality with their behavior. Each chapter presents a different perspective, revealing that no one lives in exactly the same world. It also shows that we are all only human, jointly responsible for problems, and all affected by the rules of the game. The board, the supervisory directors, the employees, but also the consumers, who still want to fly and buy products made of steel. And the journalist, who can be very judgmental, making it very daunting for a CEO to start the conversation.’
Why is it so important that students also learn about how things work at the top?
‘I regularly hear that directors and supervisory directors get a pit in their stomachs when they read my book, because they think: “this is exactly how it goes!” But others often have no idea what it's really like in the boardroom. When students read about it, I hope they understand why things go the way they do and how decisions are made at the top. Secretly, I hope there will be more awareness outside of the boardrooms, so that there will be more resistance. It’s precisely the outside world that asks the critical, fundamental questions that the inner world no longer asks. Those in power are unlikely to create a new culture at the top; they are too entrenched in their own thinking. Change will have to come from politics, trade unions and journalism.’
Many students would like to pursue a career at a large company, but also care deeply about the climate and are eager to bring about change. How can they reach the top of the company with their message?
‘I find that a very intriguing question. If you enter an organisation at a low level and that organisation is doing too little for the climate, it’s very difficult to change that. You can, however, put discussions on the agenda and try to raise awareness with your boss about the issue, in the hope that it will trickle up to the top. But I think you have a better chance of making an effective contribution in smaller organisations with a sustainable mission. They don't have as much baggage of the past and the rules that large companies do.’
Is it a lonely road to want to change the rules of the game in the boardroom?
‘By questioning the rules and the view of humanity in the boardroom, I step off the beaten path. Rules for the relationship between the Executive Board, the Supervisory Board and the shareholders are laid down in the Corporate Governance Code. A whole process preceded this, involving many people. I enjoy working on a code that is helpful in creating the right culture.’
What message do you have for students and alumni?
‘Don't be afraid to deviate from the norm and speak up. It starts in the classroom. At universities, traditional lectures, where the professor speaks and the students listen, are still the norm. Is that really the best method, and is it what students want? Dare to question that. And even within the company where you work, dare to ask “stupid questions”. Often these are not as stupid as you might think.’