While this story is a work of fiction (and as they say in the movies, any likeness to actual people or events is purely coincidental), it could easily reflect the scene in boardrooms across the country. The collapse of Enron brought increased focus on corporate governance, but examples of governance failures continue to make headlines.
So how should boards, and more specifically individual board members, behave in order to best serve?
In the simplest terms, the board of directors represents shareholders. A board's mandate is to establish policies for corporate management and oversight, making decisions on strategic issues for the company.
If you serve on a corporate board, your role is to add value to the company and its management team on behalf of its shareholders or investors. Because many of our clients, colleagues and friends serve on boards, we offer the following thoughts on how to bring quality contributions to the boardroom. All may be applied to service on the board of a nonprofit organization.
1. Show up – Sometimes what may appear to be common sense needs to be said out loud. When it comes to serving on a board, attendance matters. In fact, it is essential to accomplishing all the other recommendations on this list. The informal communication that occurs when people are together in the same room is important. Think of every meeting as mandatory.
2. Build relationships – In the boardroom, an atmosphere of trust and mutual respect is vital. Building relationships takes time (see number one), but the investment pays dividends quickly. Genuine human connection leads to openness and candor, both of which are instrumental in serving the organization’s mission and advancing strategic goals.
3. Be prepared – Beyond showing up, tangible work is required. The purpose of board meetings is not simply to be briefed, but for you to contribute to meaningful discussion based on good old-fashioned homework. Review financials in advance, understand the strategic plan and have a finger on the pulse of the competition.
4. Ask questions – Don’t be afraid to ask the seemingly obvious questions and listen to the answers. Odds are high that more than one person at the table has the same question. Often simply putting a question on the table can spark powerful discussion. As Lou Holtz said, “I never learn anything talking. I only learn things when I ask questions.”
5. Get in the weeds – It is often enlightening to get perspective from people up, down and across the organization – the folks doing the hands-on work. Seek out opportunities to talk to internal and external stakeholders or collaborators outside of the C-suite.
6. Be willing to dissent – Remember the zombie-like nodding in unison from the fictional story at our open? A skeptical voice at the table isn’t annoying, it’s invaluable. Groupthink can lead to missed signs or overlooked signals. Be willing to speak up.
7. Play a variety of roles – As in many areas of life, it is human nature for us to settle into narrow and specific roles, such as the “serious scholar” or “the life of the party” or “the class clown.” The same is true of board members. When you play only one role meeting after meeting, it makes it too easy for others to quickly ignore or dismiss your contributions as “same old, same old.” Make it your intention to play a variety of roles over the course of a year. Be the devil’s advocate, be the cheerleader for the big picture, focus on the facts and data, concentrate on the process, etc.
8. Exercise impeccable judgment – This one speaks for itself. In the case of board work and decision making, do overthink it.
9. Give yourself an annual performance review – Even if there is not a formal process in place, self-evaluation is a constructive exercise. Keep it simple. What did you do well, and what could you have done better?
10. Care – Once again, the obvious is sometimes best expressly articulated. If you care, you will do great work. Steve Jobs said, “the only way to be truly satisfied is to do what you believe is great work.” Approach your work as a board member with great care and the rest will come naturally.
Serving on a board of directors is a privilege, and it comes with considerable responsibility. In addition to bringing real, meaningful value to shareholders, it is an extraordinary opportunity for professional and personal growth.
Look for our next blog post on Board Management.
