As we come up to the holidays and we all consider new year’s plans and resolutions, I’d like to share a very inspiring article about governance. For those who are in business, sit on boards (for or not-for profit) or investors who consider governance issues as we move increasingly towards the challenges that surface when we look at sustainability and it’s role in competitiveness, the following is a summary of an article that outlines how to be the Best Non-Executive Board Director.
The author is Lucy P. Marcus and she shares the following thoughts about the role of board members.
Non-Executive board directors today need to be activists to ensure the organizations they serve do not simply survive but thrive. And, the boards on which they serve should demand no less.
The best organizations are looking for active, engaged, independent and interested boards members. These boardrooms create environments where members are comfortable, and indeed required to ask hard questions, challenge the status quo and step up to assist in the areas where they can. An independent board director should bring independence in word and deed and a fresh perspective to the organization. This comment only makes me think about the questions that are currently being asked at Maple Leaf Foods (MFI.TO) about some of their independent board members.
Activist board members engage and reach out. They ask questions inside and outside the organization and seek advice from fellow board members, senior executives, staff and investors and thus gain a fuller understanding of the challenges their organization confronts, as well as the resources and capabilities it has (and needs) to master them. Again, this is a a message that I hear with increased frequency from investors who are integrating environmental, social and governance factors in their processes. They would really like to have increased access to board members of public companies to talk about some of the issues that they see surfacing.
She continues to highlight that for a board member all of this implies a number of different strategies and she outlines some good advice:
- First, and especially at the point when joining as a new director, reach out to existing directors and get to know them beyond their bios and outside the structured board setting. Getting to know fellow executives and non-executive board members help to build board cohesion and can make a big difference in avoiding confusion in the heat of the boardroom discussion. Boards function better when the people around the table know and trust one another and feel that they are moving in the same direction.
- It is essential that today’s board members engage much more broadly than just at the board. Being approachable and reaching out to people, to talk with and especially to listen to, senior managers, staff and investors and understand and respect their views, will in turn help harness their passion and commitment to the organization.
- Understanding the nuts and bolts of the business also means asking the hard questions. It means not being satisfied with simply asking questions but doing something with the answers. Meaning, get involved on committees, etc. where you can bring these perspectives to the board room table.
- Keep an eye on global factors that shape the broader environment in which the organization operates — from government regulations to customer expectations to the constantly changing competitive landscape. This is indeed one of the greatest assets board members bring to the table.
Ms. Marcus also has a great spoken at TedX further about this issue on a segment called “Board Directors in Today’s Board Rooms”. It can be found at: http://www.youtube.com/watch?v=c6Xy-2QwY30
Happy holidays to you all and I look forward to continuing these discussion in 2011.