It’s a shock and surprise to new board members. The people they end up sharing the boardroom with can sometimes not be as good as expected.
From the outside, the boardroom appears mysterious; a place where very smart people lock themselves away to make very important decisions about very important business matters.
The truth, it turns out, is far less glamorous. The boards where you will begin your board career are more than likely going to be filled with very well-intentioned people who can lack basic business and governance knowledge and awareness.
To make matters worse, when you make them aware of this knowledge gap and try to help them overcome it, they refuse and dig their heels in deeper. Labelling you as an agitator and trouble-maker in the process, and causing unnecessary problems within the board and organisation.
I’ve been there and I don’t want you to experience the same thing. Board service should be challenging in the right ways and enjoyable; a place where you get to stretch your thinking, work as part of a high-calibre team, overcome challenges, and achieve goals.
That’s why, if you hear any of the following governance faux-pas or get a sense that this sort of thinking is the norm on a board – or even if you start to think and feel these ways – it’s time to give some serious thinking and readjusting.
1. It’s easy. All you do is show up to meetings and vote yes to everything.
Being a director is more than just showing up to the monthly board meeting. It involves a considerable time commitment that extends to: adequate meeting preparation (before the meeting, not whilst you’re sitting there waiting for it to start); committee involvement; event attendance; stakeholder engagement activities; other meetings; keeping your skills and knowledge updated; etc. etc.
AND it is so much more than just rubber-stamping everything. All matters bought to the board, and/or that are the exclusive domain of the board, require due consideration. What constitutes ‘due consideration’ is quite matter-dependent. But if you want a simple rule of thumb, smaller issues usually require less time and brain power than larger, more complex issues.
It’s OK to ask probing questions, have robust conversations, and say ‘no’ to things. This is your right and responsibility as a board member.
2. You get to tell everyone that you’re a ‘director’!
Yes, you do. But it really shouldn’t be the driving force behind your decision to pursue a board career. Some people may hold you in a perceived position of importance initially; but if you’re incompetent in the role and/or a total jerk, that will dwindle very, very quickly along with your future board career potential.
3. There’s no time or need for good governance; it just gets in the way. Largely you can do whatever you want and the rest will follow; no questions asked.
I’ve been to many meetings where the board spends all of its time looking at the here and now, without really digging into the important matters of governing an organisation and ensuring they are meeting their legal and moral obligations now and into the future. The compliance work doesn’t get done. The strategy work constantly gets deferred to future meetings. Regular ‘looking over the horizon’ conversations don’t happen.
We only have to look at some of the findings from the Royal Commission into banking to understand that this is a problem for even the most ‘sophisticated’ boards and ‘skilled’ directors.
4. Don’t ask too many questions; there’s not enough time in the meeting.
I’m a firm believer that board meetings should go for as long as they need to for the board to cover off and address everything that needs to be addressed. What you want to avoid are conversations about things that don’t matter (e.g. that the staff room needs a new kettle) that go around and around in circles without conclusion.
For meetings to be productive and efficient, all board members need to arrive fully prepared (see point #1 above) and take equal responsibility in keeping the meeting flowing and focused on the important roles and responsibilities of the directors and board.
It’s your duty to ask questions:
- That you need to ask to give you reasonable level of assurance;
- To challenge and debate ideas;
- To rigorously analyse opportunities; and
- To solve complex issues.
5. We don’t need to waste time setting a strategy.
If you don’t know where the organisation is heading or what it’s trying to achieve, how do you know if you’re making progress, achieving goals, or failing miserably.
I think that many times people avoid setting a strategy (or a plan) because they don’t know how to, and/or because if they don’t have one, they never have to risk failing.
Having a strategic goal or strategic plan helps the board focus its time, energy, and resources. It leads to making better-informed decisions and better outcomes for the people that the organisation serves.
Imagine trying to sail a boat without a rudder? Or follow a new path without a map to guide you back home? It’s like wandering aimlessly and hoping you end up finding a pot of gold at the end of a rainbow.
6. You don’t need to see the financials every month, just trust me that everything is OK.
This has got to be THE biggest red flag for any board member. And it is absolutely not OK.
As a director, it is your responsibility for the financial health of the organisation. If you don’t have oversight of this information, you can’t make the judgment that the company is financially healthy or not.
Insist on regularly seeing up-to-date financial reports prepared by an appropriately qualified person. If they are not forthcoming, consider resigning. I’ve sadly had to do that before.
7. I already know everything I need to know by now. Why should I do any director education?
With the pace of change happening in all areas that board members need to be across – business, technology, governance best practices, global economics, etc., etc. – it is paramount that an ‘always learning’ mentality is maintained and actively encouraged inside and outside of the boardroom.
Many professions – accounting, legal, HR, marketing – require the accrual of continuing professional development points gained through various learning activities over the course of a year.
You should approach your role as a director no differently. Aim to invest in a mix of formal and informal development options each year. If you’re really keen, create your own personal scorecard and set yourself a goal of completing a certain number of hours in the areas where you feel you need the most development.
It can be as simple as reading a book about business strategy, to enrolling in a course. At the very least, spend some time regularly developing and enhancing your board and director skills. Here are some more ideas for self-directed learning.
Most of us are doing our best and trying to be competent and effective board members. I trust that you are one of those.
Continue your good work and if you hear any of the above ‘words of advice’ you’ll know what to do (or not do, as the case may be).
Share in the comments below: what’s the worst piece of advice you’ve heard as a board member?