The field of knowledge board members must understand has grown sharply in today’s global economy and amid constant tech disruptions. This regular series explores many of those key topics.
What is emotional intelligence, and why should a board care?
Emotional intelligence, or EI—a term popularized by best-selling author and Korn Ferry columnist Daniel Goleman—is commonly defined as the ability to recognize, understand, and manage our own emotions, as well as the emotions of others. That’s a highfalutin way of saying it’s the wisdom and warmth behind self-knowledge and effective social skills, and although discussions about EI can sound trite, it’s an important subject well worth exploring. Emotions drive behavior and often have a broad if hidden impact—good and bad—on the environment we work in.
The Korn Ferry Institute recently conducted a study on EI and found reflective bosses with real self-awareness ran 62% of the most highly effective teams. Conversely, tone-deaf leaders with little self-knowledge ran more than half of the lowest-performing teams. “The ultimate objective of emotional intelligence is authenticity,” says Jean-Marc Laouchez, president of the Korn Ferry Institute. “Authenticity is a driver of trust—and trust is a driver of performance.”
In short, high emotional intelligence defines the most successful leaders and is at the heart of the best-run companies. “It’s all about your relationships with the ecosystem,” says Caren Merrick, the founder and CEO of Caren Merrick & Co., who sits on four public-company boards. “Boards that have a high degree of emotional intelligence are going to place a premium on how their board is providing strategic oversight to the people who are running those companies, the people who are in relationships with customers, and partners and investors.”
How EI-aware are senior executives generally?
A recent study revealed that while 89% of C-suite executives are left-brain savvy, a hefty 65% admitted their right brain wasn’t fully fired up. That means they might be business-savvy balance-sheet wizards, but when it comes to the right-brain skills of empathy and self-regulation—two elements at the heart of emotional intelligence—the senior executives confessed they fell short.
But there’s good news, too. The same study found that C-suiters who consciously take a “whole-brain approach” to leadership ultimately produce on average 22% higher revenue growth and 34% higher profitability. “Emotional intelligence makes everyone more effective,” says Deborah O’Neil, professor of organizational behavior and director of the Master of Organization Development program at Bowling Green University. “Demonstrating emotional intelligence leads to bottom-line success.”
Senior executives with high emotional intelligence also create the stable environment that is key to long-term profitability. Korn Ferry Institute research found that 16% of workers led by executives with high emotional intelligence planned to leave the company within two years, while 69% wanted to stay more than 5 years—many until retirement. Those solid figures reverse under leaders with low EI: a hefty 29% want to leave almost immediately, and only 41% want to stay at the company for the long haul. “EI is being aware of the broader impact you have on others as well as yourself,” says Laouchez. “It’s a reflection of the values of the organization.”
What are boards doing about EI?
Given this data, perhaps it’s no surprise that ever-more board members are trying to raise awareness of emotional intelligence among themselves, as a way to boost their board’s overall effectiveness, says Tierney Remick, a vice chairman and co-leader of Korn Ferry’s Board and CEO Services practice.
Indeed, this surging interest in EI is one of the driving factors behind the push for diversity and the changing dynamics that are increasingly finding their way to boards. The goal: build warmer chemistry among directors as a team, foster constructive dialogue, and make room—in the room—for every kind of voice. That’s because the most successful boards not only have high emotional intelligence, they also have a related high level of creativity, curiosity, and strategic vision.
The research keeps making the same points: when there’s a balance between EI, IQ, and CQ (or creative intelligence) on boards, says Remick, members become “very in tune” with what’s happening in the organization, with each other, and in the marketplace. But that takes conscious effort. High-functioning boards “don’t try to make it happen by chance,” she says. “There’s active engagement involved.”