SHOULD WOMEN BE MORE PROACTIVE IN BEING NOMINATED ON BOARDS?
I feel there are many misconceptions held by women (and men) around being nominated on boards. There is a commonly held view that someone is going to show up one day and call on them. My experience is that it does not really work that way. Rather, as with any career, prospective directors need to build up a portfolio of experiences and take a series of steps that move them in that direction.
At the other end of the spectrum, I have had numerous mentoring conversations with individuals who are dead set on being on a board, who say, “I want to be a director”, yet lack an understanding of what it takes. I therefore think there is a need for greater awareness of what makes somebody a compelling candidate for board roles.
To be an effective contributor on the board, most boards will seek a balance of knowledge and soft skills. This of course applies to management roles as well. The top engineer is not necessarily the best candidate to lead the engineering team. As an engineer, there is often a technical solution to a given issue, and domain expertise is paramount. But as one moves into leadership and management roles, knowledge per se is far from adequate.
When making the leap from a management role to the board, the ability to operate at 10,000 feet becomes even more important because now you are a step removed from the business. How then do you stay close to what’s happening in the industry, the market and the organisation to be able to set direction? How do you synthesise the various data points to arrive at a point of view? How do you drive towards consensus? How can you contribute in a meaningful way? It’s important to have the skill and will to manage those dynamics in order to be an effective contributor on the board.
Finally, I would highlight the importance of building a diverse personal network. Again, I find that misconceptions abound. Networking should never be about what you want or need, but about how you can build a relationship and potentially add value to the other person!
Boards and nominating committees do need to overcome the natural tendency to only approach people they know. However, let us not forget that trust and credibility are critical considerations in any board nomination process.
SHOULD MORE EFFORT BE MADE TO TRAIN DIRECTORS?
Absolutely. One can make the argument that the years of experience someone brings to a board are adequate preparation. In some cases that is certainly true, and the intent is not to minimise the significance of that experience. Yet, in many cases, women (and men) who have a notion that they might like to serve on boards really do not have a good sense of what that entails. Which is where additional preparation and training comes in.
Many people who come up through a typical corporate career path assume the natural progression is to go from management to board. Clearly, the experience one gains from a career in management is fundamental to contributing on a board. Yet the roles and requirements are different.
IN WHAT WAY?
In practice, it requires an understanding of corporate governance. For example, understanding listing rules, the Code of Corporate Governance, executive remuneration, shareholder relations and so on. It also requires a strong strategic orientation, and increasingly, a focus on transformation and organisation change.
For someone who hails from a functional background – be it finance, legal, HR, or digital – depth in that specific area of expertise needs to be complemented with an understanding of the broader industry and business context.
For someone who comes from a multinational company background, it is important to appreciate that most multinationals operate via a management structure. So even if you sit on the board of a subsidiary company, that experience often bears little resemblance to being on the board of a listed entity.
I would also make the point that both the ‘what’ as well as ‘how’ are critical. It is important to seek guidance and coaching on the soft skills required to be an effective director. Personally I have learned and continue to seek advice from directors and chairmen who have come before me. I now find myself supporting and enabling others who want to embark on a similar journey.
IT REALLY SOUNDS LIKE BEING A BOARD DIRECTOR IS NOT AN EXTENSION OF YOUR CAREER, BUT AN ENTIRELY NEW ONE.
I tend to think of it as a profession unto itself. I recommend people who are interested in serving on boards to start with a non-profit board for a cause they care about, and investing time in professional development. This will provide a foundational understanding of governance and from there, slowly but surely start building a network. Every chairman knows he or she didn’t start out with board experience. We all have to start somewhere.