Leading with Emotional Intelligence: A Guide for Board Directors

By Sanela Osmic

Lead with Emotional Intelligence and set your organization up for success!

In today's fast-paced and ever-changing corporate landscape, being a successful board director requires more than just business acumen and strategic thinking. It demands emotional intelligence - the ability to understand, manage, and harness emotions in

• Language: English
• Publisher: Ethical Governance Pty Ltd
• Release date: Sep 21, 2023
• ISBN: 9780645953206

Book preview

ABOUT THE AUTHOR

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S

anela Osmic GAICD is the Founder and Managing Director of Ethical Governance. Through acquiring almost 20 years of experience in governance and working with boards in various capacities, Sanela has helped organizations build effective boards, enhance ethical governance practices, and maximize their impact.

Her professional career has spanned multiple industries including finance, professional services, disability, government, and education. Sanela has a talent for distilling complex governance issues into clear, actionable recommendations that drive results. She is known for her ability to navigate difficult situations with grace and diplomacy and has a reputation for being an excellent listener and collaborator. Sanela holds a double degree in Economics and International Trade, as well as a Master of International Business.

With a proven track record of success and a strong passion for ethical governance, Sanela is the ideal partner to help your organization navigate the complex world of governance and drive success.

PURPOSE OF THE BOOK

A

s a springboard for success, this book, Leading with Emotional Intelligence: A Guide for Board Directors, was written to serve as an all-encompassing resource for board directors interested in cultivating their emotional intelligence. Its purpose is to educate directors on what emotional intelligence is, highlight its significance, and offer guidance on its further development.

Robert K. Cooper (1997) once said, Emotional intelligence is the ability to sense, understand, and effectively apply the power and acumen of emotions as a source of human energy, information, connection, and influence. And that is exactly what happens in the boardroom; beyond the corporate processes, professional interactions, and actions guided by numbers, we are still all humans.

The increasing integration of artificial intelligence (AI) and automation in the professional landscape has necessitated a pertinent discussion about the importance of emotional intelligence as a must-have skill. As routine tasks and jobs are being replaced by technology, the uniquely human qualities associated with emotional intelligence are becoming more valuable than ever.

In addition to the standard criteria for sharp business acumen and strong business credentials, board directors who are also emotionally intelligent are in a prime position to steer their companies to success.

Moving forward, this book provides actionable tips and tactics for using emotional intelligence in the boardroom, such as methods for making sound decisions, resolving conflicts, improving communication, and building strong relationships with colleagues. It also emphasizes the value of emotional intelligence in the boardroom, where directors must balance the needs of various stakeholders, navigate complex issues, and foster a collaborative culture to boost productivity.

Introduction

I

n today's ever-evolving business landscape, the role of board directors has transformed significantly. Beyond making strategic decisions and ensuring fiduciary responsibilities, board directors are now expected to demonstrate exceptional leadership qualities that go beyond mere intellect and experience. To truly drive organizational success, board directors must master the art of a deep understanding of emotions, empathy, and the ability to connect with others on a profound level.

Leading with Emotional Intelligence: A Guide for Board Directors is a transformative resource that equips directors with the essential tools to navigate the complexities of modern governance through the lens of emotional intelligence.

Emotional intelligence, often referred to as EI or EQ, encompasses a set of skills that enable individuals to recognize, understand, and manage their own emotions, as well as the emotions of others. It provides a framework for effective communication, collaboration, and decision-making.

In the context of board governance, emotional intelligence is an indispensable attribute that can foster trust, strengthen relationships, and guide ethical leadership.

Leading with Emotional Intelligence: A Guide for Board Directors delves into the intersection of emotional intelligence and boardroom leadership, offering valuable insights, practical strategies, and actionable steps for board directors to enhance their effectiveness and lead with purpose.

In Chapter 1, readers embark on a journey to unravel the intricate nature of emotions and emotional intelligence, and their relevance in the boardroom. It discusses the profound impact of emotions on human behavior, decision-making, and interpersonal relationships.

In addition, this chapter delves into the concept of heart intelligence, which goes beyond cognitive intelligence and taps into the power of the heart as a source of wisdom and intuition. It emphasizes the role of emotions in decision-making, highlighting the importance of listening to one's inner guidance and cultivating emotional authenticity in leadership roles. Readers will learn strategies to develop heart intelligence and leverage its transformative potential in the boardroom.

Chapter 2 provides a comprehensive overview of the five key components of emotional intelligence: self-awareness, self-regulation, motivation, empathy, and social skills. Through real-life examples and practical exercises, board directors can gain insights into developing and enhancing each component, equipping them with the emotional intelligence toolkit needed to lead effectively in the boardroom.

Furthermore, the chapter explores the unique challenges and opportunities that board directors face in leading with emotional intelligence. It addresses topics such as managing conflict, navigating diversity and inclusion, and fostering a culture of trust and accountability. Readers will learn how emotional intelligence can serve as a powerful tool in addressing these challenges and cultivating a positive boardroom environment that fosters collaboration and drives organizational success.

Chapter 3 brings emotional intelligence to life within the context of the boardroom. From strategic leadership and decision-making to stakeholder engagement and succession planning, readers will discover how emotional intelligence can elevate their effectiveness in these crucial areas.

Lastly, Chapter 4 challenges traditional notions of governance and highlights the need for an evolved approach in the modern business landscape. Readers will discover how emotional intelligence can reshape governance practices and promote transparency, accountability, and ethical decision-making in alignment with the evolving needs of stakeholders and society.

Beyond being a simple guide, this book introduces a transformative journey. It seeks to navigate directors through the subtleties of emotional intelligence, from the individual nuances of empathy and self-awareness to their larger implications on organizational health and resilience. It addresses complex boardroom dynamics and presents innovative ways to enhance collective decision-making while fostering an environment of mutual respect and understanding.

Each chapter combines theoretical knowledge with practical guidance, offering strategies and techniques to leverage emotional intelligence for optimal boardroom leadership.

This book is a valuable resource for board directors, executives, and anyone seeking to enhance their leadership abilities through the power of emotional intelligence. By embarking on this journey, readers will gain the insights, tools, and strategies to elevate their leadership presence, cultivate meaningful relationships, and shape a future where emotional intelligence is at the heart of effective governance.

UNDERSTANDING

EMOTIONAL INTELLIGENCE

Unveiling the Essence of Emotional Intelligence

"Knowing yourself is the beginning

of all wisdom."

– Aristotle

Emotional intelligence is a term used to encompass a set of skills that enable individuals to recognize, understand, and manage their own emotions and the emotions of others. It goes beyond mere intellect or academic achievements, delving into the realm of understanding and managing emotions, both within ourselves and in our interactions with others.  It entails a repertoire of abilities that empower individuals to adeptly navigate social interactions, demonstrate empathy towards others, effectively regulate their own emotions, and make informed decisions by attuning to emotional cues.

Emotional intelligence has emerged as a critical construct in understanding human behavior and success in various domains. More than just being aware of our feelings, emotional intelligence involves effectively utilizing our emotions to guide our thoughts, behavior, and decision-making processes. It empowers individuals to navigate the complexities of life with wisdom and compassion.

By delving into the realm of emotional intelligence, individuals open themselves to a deeper understanding of the intricate interplay between emotions, cognition, and interpersonal relationships. This exploration invites them to discover the realms of self-awareness, self-regulation, empathy, and social skills. Understanding emotional intelligence not only enables individuals to navigate their own emotional landscapes with grace and resilience, but also equips them with invaluable tools to forge deeper connections, enhance communication, and lead more fulfilling and successful lives.

The essence of emotional intelligence lies in its transformative power. It enables individuals to regulate their emotions effectively, making them resilient in the face of adversity. Emotionally intelligent individuals have the ability to manage stress, control impulses, adapt to change, remain calm and composed, and make well-informed decisions, even in challenging situations. They can find it easier to maintain a positive mindset, seek opportunities for growth, and bounce back from setbacks with determination. Consequently, grasping the significance of emotional intelligence is paramount.

In the forthcoming chapters, we will embark on a captivating journey to unravel the essence of emotional intelligence, delving into its intricate nature and multifaceted components.

Mayer and Salovey (1997) introduced the concept of emotional intelligence as a distinct form of intelligence. They proposed a model of emotional intelligence consisting of four components: perceiving emotions, using emotions to facilitate thinking, understanding emotions, and managing emotions. According to their research, individuals with higher emotional intelligence tend to have better interpersonal relationships, cope with stress more effectively, and demonstrate higher levels of overall well-being.

Goleman (1995) expanded on this model and introduced the concept of emotional intelligence in leadership. His research highlighted that leaders with higher emotional intelligence exhibit better self-awareness, empathy, and interpersonal skills, leading to enhanced team performance and organizational outcomes. Goleman also proposed that EI is a more accurate predictor of success than traditional measures of intelligence, and delineated five fundamental elements comprising emotional intelligence.

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The five key components of emotional intelligence (according to Goleman) are:

Self-awareness: The ability to recognize and understand one's own emotions, values, strengths and weaknesses. Self-aware individuals are attuned to their emotional state and can accurately assess their thoughts and behavior.

Self-regulation: Refers to the ability to manage and control one's emotions, impulses, and behaviors in appropriate ways. This includes managing stress, adapting to change, and maintaining emotional stability in challenging situations.

Motivation: Motivation in the context of emotional intelligence refers to the ability to channel emotions toward achieving personal and professional goals. Individuals with high emotional intelligence are self-driven, resilient, and able to maintain a positive attitude even in the face of setbacks.

Social awareness / empathy: This involves understanding and sharing the emotions of others. It allows individuals to perceive and respond to the feelings and needs of others, fostering better interpersonal relationships and effective communication.

Relationship management / social skills: Social skills encompass a range of abilities, including effective communication, conflict resolution, teamwork, and leadership. Those with developed social skills can build and maintain strong relationships, influence others positively, and navigate social dynamics adeptly.

Extensive research has been conducted to understand the impact of emotional intelligence on various aspects of life. Numerous studies have highlighted the benefits of high emotional intelligence in personal and professional domains.

In the workplace, employees with high emotional intelligence exhibit better job performance, leadership skills, and decision-making abilities. A meta-analysis conducted by Joseph and Newman (2010) found a significant correlation between emotional intelligence and job performance across different industries and occupations.

Additionally, employees with higher EI are more likely to display organizational citizenship behaviors, such as helping colleagues and going beyond their job requirements. This notion was substantiated by Côté and Miners (2006), who also discovered a positive association between emotional intelligence and job performance.

Emotional intelligence plays a vital role in leadership effectiveness. A study by Boyatzis, Smith, and Blaize (2006) found that leaders with higher emotional intelligence positively influenced employee engagement, job satisfaction, and overall team performance. Leaders who demonstrate empathy, self-awareness, and strong interpersonal skills create a supportive and collaborative work environment that fosters creativity, innovation, and productivity.

In the realm of education, research suggests that emotional intelligence contributes to academic success. A study by Brackett, Rivers, and Salovey (2011) found that students with higher emotional intelligence demonstrated better academic achievement, stronger social relationships, and fewer behavioral problems. They found that EI skills, such as self-regulation and empathy, enhanced students' ability to manage stress, cope with challenges, and build positive relationships with peers and teachers.

Furthermore, emotional intelligence has a profound impact on personal relationships and overall well-being. Individuals with higher EI experience more satisfying and fulfilling relationships, better communication, and higher levels of empathy. A study conducted by Ciarrochi, Deane and Anderson (2002) found that emotional intelligence was positively associated with various aspects of relationship dynamics, including relationship satisfaction, conflict resolution skills, and overall relationship quality.

Similarly, another study by Brackett and Mayer (2003) explored the relationship between emotional intelligence and life satisfaction. The findings indicated that individuals with higher emotional intelligence tend to experience greater life satisfaction and overall well-being.

Research also shows that individuals with high emotional intelligence have lower levels of stress, anxiety, and depression. They possess effective coping strategies and are better equipped to manage challenging situations.

Emotional intelligence is particularly important in the boardroom, where relationships between board directors and the executive leadership team can be intricate and intense. Board directors who possess advanced emotional intelligence are more adept at cultivating trust, handling conflicts, and reaching decisions that yield overall benefits to the organization.

Previous studies substantiate that boards with elevated emotional intelligence skills are more inclined to attain their strategic objectives and excel in their performance. Research for Vantage Circle (2023) supports these claims, finding that emotional intelligence has an influence of 58% on job performance. In a striking display of commitment to this concept, some companies have even embraced the integration of emotional intelligence assessments within their recruitment and evaluation processes.

Emotional intelligence is not an immutable trait, but a dynamic attribute that can be nurtured and refined over time through deliberate practice and introspection. By prioritizing emotional intelligence in their interactions and actively striving to improve their skills in this domain, board directors possess the capacity to propel their organizations towards thriving success.

Significance of Emotional Intelligence in Corporate Governance

Corporate governance plays a crucial role in the success and effectiveness of an organization. Emotional intelligence has gained increasing recognition as a critical factor in effective corporate governance. Corporate leaders are expected to possess not only technical expertise but also strong emotional intelligence skills.

Emotional intelligence is often mistakenly labeled as a mere soft skill, implying that it is secondary to technical expertise or strategic acumen. However, research and real-world experiences have consistently shown that EI is far from being just a nice-to-have attribute; it is a critical competency that drives leadership effectiveness and shapes the dynamics within the boardroom.

In the wake of rising technology and artificial intelligence, emotional intelligence is vital for board directors, particularly in terms of fostering critical thinking and decision-making. As technology continues to advance and reshape industries, board directors must navigate the complexities of digital transformations, emerging risks, and the ethical implications of AI. Emotional intelligence becomes a crucial competency that enhances their ability to lead effectively and make informed decisions.

Technology and AI excel in tasks that require logical reasoning, data analysis, and problem-solving based on predetermined algorithms. Emotionally intelligent directors, however, have the capacity to analyze these inputs through a human lens, considering the broader implications for stakeholders, employees, and wider society. They can recognize potential biases or ethical concerns and approach decision-making with a balanced perspective, weighing both logical and emotional factors.

Additionally, emotional intelligence enhances the ability to manage the uncertainties and disruptions associated with technological advancements. As boards navigate complex strategic decisions, emotionally intelligent directors can empathize with the concerns and anxieties of employees and stakeholders. They can effectively communicate the rationale behind technology-driven changes, addressing emotional reactions and providing reassurance. Emotional intelligence helps directors build trust, promote open dialogue, and foster collaboration within the boardroom, leading to better decision outcomes.

Moreover, emotional intelligence is essential for addressing the ethical dimensions of technology and AI. As these technologies become more integrated into our lives, board directors must grapple with issues such as data privacy, algorithmic biases, and the potential displacement of workers. Emotional intelligence allows directors to consider the ethical implications of these developments, ensuring that decisions align with organizational values and broader societal interests. This can be achieved through actively engaging in discussions about the responsible use of technology, advocating for transparency, and providing guidance on the