Boards have existed since the 17th or 18th century in different forms and with evolving functions. They’ve evolved very slowly and been very reactive to change, relative to other corporate functions. In this podcast Jaime Grego-Mayor: Managing Partner, Advisory Board Architects talks to Mark Hamill about how to become a board member and add value to a board.
Summary text of Global Conference Call
Jaime Grego-Mayor: Managing Partner, Advisory Board Architects
Let me give you a very brief bit of history of boards. Boards have existed since the 17th or 18th century in different forms and with evolving functions. They’ve evolved very slowly and been very reactive to change, relative to other corporate functions.
Through an ongoing cycle of corporate scandal à new rules à corporate scandal, BoDs have been saddled with new and ever more complex requirements. This has been to the detriment of other key functions of the board, like strategy formation and company growth.
This has affected mostly publicly listed companies, while basically ignoring the needs of the vast majority of companies, the unlisted. It has, however, affected how those companies consider governance and boards by way of so called best practices. Governance has become, for many, a necessary evil of no real benefit.
Boards are the apex of companies, with a non-executive role that can accurately be described as governance, but there is a great difference between complying with governance rules to the letter and having true good governance. Having a board that is solely centered on control is grievously underutilizing its capacity. At ABA, we know companies can and should improve board performance to use 100% of their capacity and create high and quantifiable strategic impact.
This is especially true in unlisted companies where ownership and decision making is concentrated. These companies do not need complex shareholder representation structures, but they do need a group that will provide a sounding board, support and subject matter expertise to the CEO. This can be done through the conventional Fiduciary Board of Directors structure, but can also frequently be done as effectively through non-fiduciary Advisory Board structures.
It’s done by starting with the end in mind. A company needs to think of 3 things when considering its board: WHY, WHO and HOW.
First: WHY they want a board. What are the mid and long- term goals that a group of subject matter experts should help them to achieve.
Then, and only then, consider WHO to put on the board: people who will drive the company towards the WHY.
Finally, HOW to run an effective board process to maximize impact. What structure, meeting cadence, and the process before, during and after meetings.
From that background, let me pull out strands that are important as you consider being a board member. Again, start with the end in mind: WHY, WHO and HOW.
WHY do you want to be a board member? It should be to have a high impact on the company and yourself as well, through the learning this experience provides.
WHO should you want to be a board member for:
First, change your concept of the post from board member to board leader. Clubs have members. Boards need leaders.
Be a board leader where your experience and expertise is directly applicable and impactful to helping the company go from where it is to where it wants to be. Where you can be the right WHO to their WHY.
Be a board leader where you will not be alone as an independent thinker. WHO will sit around the table with you? Will it be enriching to you to sit with them?
Be a board leader where you see there is a good board process, a good HOW:
Where the role of the board is not only control, but also business strategy and growth; where the board is well run; where each meeting has a clearly set out agenda; where good documentation is sent out in time; where board, and board leaders are evaluated. And most importantly, where executives are prepared to listen and learn from their board.
Important steps to take to get the first board seat:
First, get trained. Governance organizations around the world offer this kind of training (more focused on traditional governance). ABA offers training as well, focused more around strategic impact and effective planning for getting that board seat.
Second, adapt your resume for board positions. Consider and highlight those areas of expertise that make you more unique. Go beyond strategic thinking and generalist knowledge to subject matter expertise.
Third, get involved. This can be done through mentorship programs for smaller companies or sitting on the board of an interesting non-profit.
Fourth, get networked. Talk to people like ABA, SF and other headhunters, PE funds that invest in company types where you could have impact, auditors and lawyers (who often act as board secretaries).
Fifth, review your contacts and talk to people who are directors, advisors or CEOs that you respect and who respect you, about the idea of having a board of directors or board of advisors – or a better one than they do now – and how this can make their company perform significantly better.
Sixth, don’t take the first board seat that’s offered without making sure you will be able to truly impact the board and the company as a board leader. Having that impact will be rewarding and make you feel engaged. At ABA we’ve found that the most important indicator of board effectiveness is board leader engagement.
Finally: Your most valuable and irreplaceable asset is your time, use it wisely.
Get involved with boards where you will enrich others and be enriched. Get involved with boards where you feel engaged. Get involved with boards where you will create true IMPACT.
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Rex was hired as a Project Director for a multinational factory in China. He held a similar role with another multinational before accepting this new position. The recruitment process was rigorous and exhaustive with many rounds of interviews with various department heads at regional and global levels. Rex was offered the position and accepted, reporting to his new boss (The Global Head of Supply Chain) who was based half way around the world. In his new role, Rex did not directly manage a team, however, he was responsible for managing several department heads that did not report to him. Rex was also responsible for updating all key stakeholders at headquarters on a project’s status. Sadly, Rex only lasted one year in this role, since he was not able to match the performance expectations of multiple stakeholders. This is a situation where Rex would have benefited from executive coaching. Amidst the daily demands of his job and the expectations of his stakeholders, Rex needed to better manage his focus while making strategic decisions at every moment to achieve goals and make progress. Like Rex, every level of management can benefit from coaching. But the individuals who benefit the most from executive coaching are those who are motivated to pursue growth in their personal and professional lives. In most cases, new hires at every level do not receive enough support for grasping an organization’s culture. Michael D. Watkins, Professor of Leadership and Organizational Change at IMD and author of “The First 90 Days: Critical Success Strategies for New Leaders at All Levels,” explains that all new hires at every level must gain insights into the values, norms, and guiding assumptions of an organization. At the same time, they must navigate the very fine line between working within the existing culture framework and seeking to change it. Executive coaching is a natural next step in working with companies transform their businesses and aligns perfectly with my own life purpose and passion. I have been working as a retained executive search consultant for over 10 years, helping companies succeed by finding the right leaders as a search consultant, and then coaching these senior executives to reach their fullest potential. Transitions are always difficult for any organization. Whether through an internal promotion or an external hire, most senior executives receive only a basic orientation and onboarding. In a recent Harvard Business Review article, “Onboarding Isn’t Enough,” co-author Michael D. Watkins finds most companies are doing little to support the onboarding process. “Nearly all large companies are competent at the administrative basics of signing leaders up, but that level of onboarding does little to prevent the problems that can arise when working with new colleagues and grappling with unfamiliar cultural norms and expectations,” Watkins says. In my discussions with HR decision makers and business leaders about their biggest challenges, I have learned that many companies are trying to transform their organizations in a marketplace where disruption is constant. In this VUCA environment, some of their strongest business leaders were not performing as successfully as they once had and were having difficulty adapting to change, new market landscapes and new processes. These are very common themes and challenges that I consistently hear from companies in my travels. I realized that as an executive search consultant, my value in impacting a company positively stopped at the recruitment and hiring process. I knew that I wanted to continue helping clients and executives succeed beyond the appointment of a senior leader, and this is why I began executive coaching. Technology advances in the last several years have created a much faster and more complex world. According to the renowned mindfulness expert Rasmus Hougaard, our attention in the workplace is under siege. We are constantly under pressure, always on, overloaded with information and trying to work in distracting environments. Executives today face many more challenges in adapting to change and successfully keeping pace with these complex work environments, compared to ten years ago. Authors Thomas H. Davenport and John C. Beck in their book, “The Attention Economy: Understanding the New Currency of Business”, advocate that understanding and managing attention is now the single most important determinant of business success. Coaching positively impacts a company’s bottom line by helping executives remain present, be focused and make optimal moment-by-moment decisions that deliver optimal results. As I look back at my work as a search consultant, my most fulfilling moments were helping executives achieve their goals. Many senior executives in Asia, Europe and the US have reached out to me to explore job opportunities, but also seek career guidance. With every inquiry, I always tried to take the time to share my thoughts and advice. In doing so, I felt I was giving back to those who mentored me throughout my own corporate career. Many search firms like SpenglerFox offer executive coaching and HR consultancy services in addition to traditional retained executive search. To receive further information about the executive coaching services, please contact Mary Kramer at email@example.com. About the Author: Victor Filamor Victor Filamor was SpenglerFox’s Country Manager Hong Kong and Asia Consumer Practice Leader in 2007/8. He is currently a Partner and Certified Executive Coach with a retained executive search & leadership advisory firm in Hong Kong and Singapore specializing in the Consumer & Retail and Industrial sectors. Prior to his executive search career of over a decade, he had 25 years of P&L management, as well as marketing, sales and operations management experience with Consumer and Industrial Fortune 500 companies and Asian multinationals. He has lived in four countries across Asia Pacific.