Institute Corporate Directors, July 5, 2016
What skills do boards value most highly today – is there a shortage of some skillsets?
As a prospective board member, you have to be asking yourself: “Why me, rather than the next person? What is the unique individual contribution I could make to this particular Company board?” The more a candidate can have that lens, the more productive the conversation will be.
You must have a genuine, fundamental and intrinsic interest in the business, otherwise you shouldn’t pursue the discussion. As a new director, you are going to be expected to dig in hard. The pre-reads for board meetings today are significant. You’re probably spending a day to prepare for each meeting, and that gets old really fast if you don’t have the interest.
It’s important to remember, it’s easier to get on a board than off of one. The market expects a minimum board term to last six years. If you come off before then, the market is not going to draw a positive conclusion for the individual or the organization. So employ the old carpenter’s saying and “measure twice, cut once.”
What is the most important advice you would offer to an aspiring director?
Twenty-five years ago, the average director might sit on six to 10 different boards. There was no expectation of full attendance, and the pre-reads were skinny. Today, shareholders demand that the director treat the role like a real job. That means the first thing you must ask yourself is whether you have the time. You start with the calendar – can you make the meetings? This represents the minimum commitment. Then realize that any significant event, such as a change in CEO, an acquisition or product recall, is going to create additional demands on your time. Being a director can be a heavy burden, and it’s not ideal for process-folks who like to tick boxes. A board needs people who are passionate and who will be pulling for the company.
Also, it is understandable that every aspiring director is keen to get that first board seat. She or he knows it’s important to get experience under one’s belt. As a result, it may seem counterintuitive but I think it is critical to really drill down to ask whether you are genuinely simpatico with members of the board and management? You really do want to get a sense of the values of those with whom you will be in the foxhole before signing on.
How important is continuing director education and professional development for directors?
It’s an evolving world and you should always be learning. Some of that occurs on the job, hopefully at every board meeting. Everyone learns in their own way and there are always going to be issues for which we need to develop greater comfort, whether through courses at the ICD or through our own initiatives.
Do you have one particular piece of advice on becoming an effective director?
Be prepared to ask the uncomfortable or seemingly naive question. One of the most frequent complaints I hear about a non-performing director is that they sit quietly and don’t engage. You must lean in, and the best way to do that is to prepare as best you can. Boards are looking for directors who possess independence and backbone and are prepared to challenge fundamental assumptions. A good director is going to stress test what management is proposing. It is a key part of a board member’s role.