Across today’s fast-paced, dynamic, interconnected business landscape, companies must be fast, nimble, and flexible to successfully deliver on their goals. The ability of a Board of Directors to work together effectively to provide the requisite guidance, expertise, frameworks, direction, and support that enable organizations to drive results is paramount.
At their core, corporate boards are responsible for ensuring sound governance, controls, and financial performance of the company; a viable and sound business strategy; a first-rate CEO to effectively run and lead the organization; and a fiduciary obligation to shareholders.
The role of an individual Board member, then, is to positively contribute to the Board by bringing his or her expertise, a spirit of collegiality, and open dialogue – speaking his or her mind and acting independently on strategy, policy, succession, and risk management – both as a part of normal business and as an outcome of an unexpected development such as the outbreak of the Coronavirus.
Once you’ve been appointed to a Board, what can you do to ensure your most effective contribution from the start? In my experience, it begins with early preparation, positive actions, and constructive behaviors.
Perform a deep information dive prior to your official start to better understand the situation you’re about to enter.
- Research public information on the company and the industry.
- Determine who else is on the Board and what are their backgrounds.
- Interview the CEO and other Board members - what do they see as the key challenges, opportunities, and short and long-term issues in the industry and within the company. Are there any immediate issues that need to be addressed and resolved?
Allocate ample time at the start of your appointment to quickly build your depth of knowledge.
- Conduct a discussion with the Chairman or Lead Director on company vision, strategy, and positioning as well as potential board committee assignments.
- Review the company’s strategic plan, operating plan/documents, and risk plan. Get familiar with any outstanding legal and/or regulatory issues.
- Review documents related to prior year Board meetings. What was emphasized by the Board? What decisions were made and what actions were taken?
- Understand M&A activity. Is there an M&A plan in place? Were there any material acquisitions or divestitures in the last 12 months? Are there current discussions or inquiries both as an acquirer and as a potential target of others? Are activist investors targeting or involved with the company?
- Spend some “soak time” with the CEO. Have a set of questions and be sure to listen to the answers.
- If you are given a Committee assignment, reach out to the other Committee members. What do they each see as key opportunities and challenges? What Committee business is pending?
Over time, interact with other members, C-Suite, and Business Unit heads. For example:
- CFO – understand the financials including debt carrying obligations and servicing costs, P&L, Balance Sheet, Cash Flow Statement, stock buyback plans, and any specific financial or tax issues.
- CHRO – understand the talent management and succession planning strategy and what retention and attrition data show.
- Chief Legal Officer – is there any critical outstanding litigation and what future litigation is anticipated? Are there any regulatory or other potential issues you need to understand?
Visit a representative sample of company sites and facilities.
- Get a sense of field operations including production, distribution, R&D, sales, and call centers.
- Get to know the field leadership.
- Perform a visual inspection of critical facilities.
- Understand the organizational configuration and the company’s union posture, strategy, and tactics.
- Understand the key operational levers and business value drivers.
Be a keen observer of process, dynamics, and mechanics on the Board such as the rhythm of discourse and the flow of information.
- How is information conveyed?
- How much is questioned?
- How does the agenda move from topic to topic and who takes the lead?
- How deep or wide is the agenda?
Be an active contributor with a spirit of collaboration, contribution, and encouragement.
- Listen carefully.
- Ask thoughtful questions.
- Share your perspective.
- Provide wisdom.
- Don’t be overbearing.
- Don’t get caught up in groupthink.
- Assert yourself when necessary.
Maintain continuity and forward momentum.
- Demonstrate accountability and responsibility.
- Review updates and progress reports, particularly on issues with greatest risk to the company, regulatory interactions, acquisitions/divestitures, product launches, and reputational changes to the company.
Hone your personal qualities with focus on the following 9 attributes.
- Energy. Board positions are demanding, both intellectually and physically. Maintain a high level of energy to fuel your forward momentum.
- Communication. Engage in respectful conversation. Listen attentively and be clear and succinct in your comments and questions.
- Courage. Be comfortable offering an independent point of view. After all, your unique experience and perspective is why you were brought on board.
- Absorption and Synthesis. You will be exposed to a large amount of information over a short period of time, particularly at the start. Dedicate the time necessary to become educated and knowledgeable.
- Emotional Intelligence. Recognize emotional cues and use emotional information to guide your thinking and behavior. Mentally step into the shoes of others before asserting yourself.
- Detachment. Maintain a healthy level of detachment separate from the social side of engagement with the CEO or Executive Team. Focus on what’s best for the business and the company.
- Humility. Board directors are highly accomplished and often well known. Checking egos at the door and self-effacement provide the strongest foundation for collaboration and a productive esprit de corps.
- Sense of Humor. Embrace humor in yourself and others.It helps dissipate and release tensions, facilitating a stronger team dynamic.
- Action Orientation. When it comes to critical issues, you may not have the answers, but the Board should have a plan that drives to resolution.
Board dynamics have changed significantly in recent years. There are prominent activist investors who are ubiquitous and aggressive. The advent and presence of social media and the media overall drives a broad and rapid transmission of information and stories with more public facing issues requiring more ad hoc communications strategies. Companies are running more global operations with increasing complexities that must be built into company strategies. The ongoing war for talent continues to drive unprecedented cross-industry demand for highly technical and experienced individuals at all levels of the organization. And proactively cooperating with governments and regulatory agencies is essential.
In summary, complexity, interconnectedness, disruption, and the unrelenting pace of change all characterize today’s business environment. Hitting the ground running in a new Board role will accelerate your contribution and thus the Board’s ability to successfully navigate complex landscapes and help drive business success.
ECC Executive Partners are proven C-Suite executives who provide specialized, confidential mentor and advisory support for C-Suite executives and executive candidates. If you or your organization are looking to enhance leadership, drive business results, and accelerate success, we’d welcome the opportunity to partner with you. Give us a call at +1.847.920.0190.
Mitch Wienick is an ECC Executive Partner based in Philadelphia, Pennsylvania, USA. Prior to ECC, Mitch was an experienced Chief Executive with over 40 years in top positions in the Business Services, Telecommunications, and Consumer Packaged Goods industries. He has served on the Boards of Cielo, Inc., CDI Corporation, Atlantic Community Bankers Bank, Speakeasy Inc., and The CEO Alliance of Philadelphia. Mitch holds a MBA from New York University’s Leonard N. Stern School of Business, and a BA in Economics from Brooklyn College of the City University of New York.