In the course of our director evaluation and board renewal work with boards we frequently encounter directors wrestling with the extent that they can add value in their early days on a board. Based on this experience, and comparison across boards, this article suggests how newish directors can facilitate their induction.
Not surprisingly, our director evaluation and board renewal work shows that all directors want to do the best job possible when they join a board – they want to know they are making a contribution and adding value. But unless directors can get up to speed quickly and start earning the respect of their colleagues and management, they can run the risk of being viewed as a passenger or, even worse, a ‘wasted appointment’.
Here are some tips for directors to focus on when they join a new board:
1. Educate yourself on the core business operations
Nothing is more important than quickly coming to grips with how the business operates – not so that you can delve into the detail, but so that you can ask the right questions to ensure effective oversight and governance. This can often be challenging and it can take some time to acquire the required level of understanding, but you can fast-track this process by:
- Initiating your own meetings with executives, site visits etc. with the support of the chairman and CEO. There is nothing like going out and observing the operations of a business to help you understand how things work.
- Going beyond what is provided to you in the initial induction process. Board induction processes usually deliver the bare minimum to get you started – do not assume that this is all you need to do.
- Reading and researching as much as you can about the organisation.
- Imagine that you are planning to write a thesis – you need to read everything you can lay your hands on!
- Keep asking questions – the best directors are those who keep drilling down until they fully understand how something works.
2. Act with a sense of urgency
It is critical that you push yourself to make a valuable contribution at your first board meeting, even if you feel out of your comfort zone. Sitting at the board table with your ‘training wheels’ on for the first few meetings creates a negative impression on your colleagues and on the management team, so you need to think carefully about the best way you can add value to the board’s discussion. If you have done your homework thoroughly before your first meeting (see step 1) you will be in a better position to make a useful contribution.
It can also be useful to set goals for yourself to stay focussed on your own ‘on-boarding’. For example, you may resolve to visit 50% of the organisation’s operations within your first 6 months on the board. Many boards have instituted site visits as part of the board’s annual work program, but is it possible for you to go beyond the expected site visit program in your own time and at your own expense? We know directors who, with the support of the chairman and CEO, regularly incorporates site visits into their own annual vacation.
3. Plan your questions and comments
Everything you say will be closely scrutinised during your first few meetings. Your colleagues will be looking for ‘pithy’ questions, for observations or insights not obvious to others, or for comments that go to the ‘heart of the matter’. Some boards have little tolerance for questions that do not help to move the discussion/decision-making process forward, or take up the board’s time without adding much value so it is important that you think carefully about the questions you are planning to ask at the meeting. Test your planned questions or comments against the following criteria:
- Does your question/comment consider the impact of the item or proposal on strategy?
- Does your question/comment consider the impact of the item or proposal on risk?
- Does your question/comment add value to managements’ thinking about the item or proposal?
4. Be highly engaged
While it is always important for directors to demonstrate a high level of engagement, this is particularly important in your early days on the board. Make sure that you join/attend as many committees as you can manage – this is an effective way to quickly come to grips with key board processes and responsibilities. Ideally, you should aim to attend meetings of all board committees in your early months on the board. Make sure that you volunteer for any committees temporarily established to review projects, M&A opportunities etc, as these are also contribute to developing a deeper understanding of the business. If the chairman offers the opportunity to call or to follow up on a matter, always make sure that you do so. Failing to take up such opportunities could be interpreted as a lack of interest or engagement.
Ideally, you should aim to fully immerse yourself in the work of the organisation and the board so that it becomes your main focus for a period of time. The benefit of this investment is that you will have won the respect and support of your fellow board members and management team, and you will be seen as a great addition to the board.© Guerdon Associates 2021 Back to all articles