7 Ways Board Directors Can Add Value
The world is transforming around us at an unsettling pace — bitcoins, robotics, drones and a myriad of other technical advances are changing business models across every industry.
According to the National Association of Corporate Directors, the two top issues for boards in 2017-2018? Significant industry changes and business model disruption.
Never before have boards played such an important role in asking probing questions of management, and bringing an outside perspective into the boardroom to ensure that the company is not blindsided by emerging technologies or new competitors.
Excellent boards go beyond governance — they serve as strategic assets to companies and help them reach their full potential. Savvy directors are pushing themselves to keep up with the swift changes happening in the world. Rather than relying on past experience, they’re actively seeking new experiences and contacts that will enable them to develop a fresh perspective to better understand the challenges being faced by companies today.
Here, seven ways directors can keep up and stay current to add value in today’s boardroom.
- Engage between board meetings. A constant challenge for companies is timely, transparent and relevant communication leading to key decisions. While the big decisions are finalized at board meetings, key issues are often discussed between board meetings. Touching base and being available to provide advice and ideas as strategy and projects unfold is just as important as your input during board meetings. Building a strong rapport with your CEO and other key executives will keep you engaged on the front lines.
- Put on the hats of both the customer and the employee. Knowing how customers and employees perceive your business will give you a 360-degree view of the business and enable you to engage with management and your fellow board members in a more meaningful way. Take time to visit stores, offices or plants on an ongoing basis to maintain a fresh perspective about what is happening in the business. Talk to customers with whom you come in contact in the course of your travels and daily life to get their insights. Check out competitors to see what they offer that your company does not. And keep up with what employees are saying on websites such as Glassdoor (glassdoor.com) and Blind (teamblind.com). Follow your own executives, as well as key executives at your competitors, on Twitter and Accompany, a relationship intelligence platform app that provides a data platform to give you insights on executives and companies.
- Learn from other directors. Across industries, directors are all dealing with the same issues: business model disruption, CEO succession, activist shareholders. Surround yourself with directors from other companies to learn how they are handling the tough issues in their companies. Forums like the National Association of Corporate Directors (nacdonline.org) which has 22 chapters across the country, are a great way to expand your director network and bring best practices into your boardroom.
- Bring in experts to address challenges and possibilities. Outside experts can offer fresh perspectives in the boardroom on trends and new technologies. Much like boards use other advisors, an industry and or technology advisor can aid the full board to determine what’s going on outside the company, and just a session or two can double as director education. In times of great change, it’s important that boards avail themselves to key outside opinions in addition to those of management.
- Develop new skills — and stay on top of technology innovations. Being a value-added director means you need to continue to grow and enhance your own skill set. Take a class on cybersecurity, social media or governance best practices. Seminars and classes offered by law firms, accounting firms, universities, and associations are great ways to learn new skills that enhance your value as a director. Conveniently, many courses are offered online. Attend a trade show, such as the Consumer Electronic Show or Mobile World Congress, annual events that showcase the latest in technology disruption. Leverage your favorite news website (Flipboard, Feedly, News360, etc.) and publications that provide insights about technologies that are shaping the future, such as Blockchain News, IoT Tech News, and TechCrunch. New technology can feel intimidating, but you can leverage the latest tools and techniques as valuable assets to improve your performance, and your relevancy, as a director.
- Don’t give up your day job. As the world continues to change quickly, it’s more important than ever to have directors who are also active executives facing today’s challenges. While a mix of active and retired executives on a board is desirable, the importance of current or recent C-level executive experience is growing. Think twice about retiring from a day job to join a board or two — the expiration date on director’s relevancy is likely to shorten in the coming decade.
- Create a portfolio of business activities. Directors who are not in a full-time executive role can stay current by combining several activities to stay in the mix on key business trends. Such a portfolio could include a few public company boards, a large national nonprofit or advisory board, and consulting engagements or temporary work with private equity firms. These activities provide exposure to the problems and opportunities faced by other organizations and will connect you with leaders that bring insights from their own day jobs.
Today’s best-in-class directors realize that continuous personal growth is critical to staying on top of their game and be a respected resource in the boardroom. Continuing to up your game and to embrace the winds of change can not only fill you with knowledge, but also solidify your role as the board member others turn to for insight, guidance and direction.
Lauren E. Smith is a Managing Director in the Board Practice at Diversified Search. This article first appeared in the Fall 2018 issue of Directors & Boards. You can see it here.