Being An Effective Board Member

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Since 2009 I have sat on the boards of four public and private companies of significant size, one relatively large NGO, two academic boards, and two relatively large state government boards.  During those years and before, I was the Chief Legal Officer to two public companies, sat on hundreds of subsidiary boards around the world, and multiple volunteer boards.  I have benefited from exposure to numerous men and women of substance, mentors, and also some truly awful human beings.  The later were thankfully few and far between, but even they taught me important lessons.

Preparation.  When you join a board insist on a comprehensive orientation with site visits. Read every substantive regulatory filing, marketing and sales document, any document relevant to culture, financial statements, a sample of operations documents, and anything relevant to the industry.  Ask questions and use the exchange to establish a personal relationship with management.  Before each board and board committee meeting read the board book and reread relevant material from orientation.  Speak to the Chairman and CEO (if the roles are separate) before the meeting.  Meaningfully discuss the agenda, issues that concern you, and make suggestions so they know before the meeting your state of mind.

Lack of preparation is the most common trait of bad directors.

Role of Committees. Seek to serve on committees that make use of your talents: substantive expertise; financial acumen; personality attributes; and crisis skills. Committees serve two basic purposes. They divide the work of the board to reduce the burden on the overall board. They create manageable groups to consider complex issues and make recommendations to the whole board. If you lose confidence in a committee, volunteer for it or resign from the board.

Boards Are Not Political Bodies. If you are a frustrated politician, do not serve on boards as a substitute. Boards work through consensus and respect. Bomb throwing, dividing members into warring groups, campaigning for power, trading votes, and the litany of modern political practices destroy the ability of the board to support the organization. Allow the board or the shareholders/appointers to draft you into leadership roles. Campaigning for leadership is about your aspirations. A draft movement is about the good of the organization.

Communication with Management. Always communicate to management through the CEO/Executive Director. Never communicate directly with staff at any level. Even if you have standing permission from the CEO/Executive Director, seek it again for anything potentially controversial, and always report the result of the conversation promptly to the CEO/Executive Director. Make sure your communications are about the good of the organization and management, not your own ego or interests.

Bring Something Innovative to Every Board Meeting. This is a natural result of proper preparation. Offer the idea at an appropriate time. If it does not interest the board or management, do not insist on further consideration.

Practice Active Participation. Make eye contact with presenters. Sit forward during presentations. Never check for non-board material on your phone, tablet, or computer during presentation, discussion, or votes. If you ask a question or make a comment, listen to the response. Avoid public and obvious signs of disapproval or displeasure. Never seek to use parliamentary maneuvers to get your own way. Contribute to timely conclusions of debate and issues. Use terms of respect: “Mr. Chairman”; ” Thank you Madame Chairwoman”; “Director Smith”; and “please”. Complement management and your fellow members publicly. Offer constructive criticism behind the scenes. Always offer it.

Crisis Management. Managing a crisis is a learned experienced. I have faced the murder of a Chairman/Founder/Former CEO in the glare of the NYC press, multiple corporate bankruptcies, multiple ethics violations of officers and directors, regulatory investigations, breakdowns in strategic relationships, and other paralyzing events. But, early in my career as a CLO a board member suggested reading a crisis management book and attending a course. It was incredibly valuable to learn techniques to manage crisis. You learn the goal of crisis management is to move from the acute phase to a recovery phase without a chronic phase. You learn the utility of splitting roles so parts of management and the board focus on the organization’s prime mission and other parts solely on the crisis. You understand the difference between regular public relations and crisis public relations plus the firms that specialize in them.

Insist on Difficult Conversations. All organizations face a host of phenomenon we would all prefer just disappeared with time. My experience is great organizations insist on discussing these events as early as possible. Do not insist on a particular resolution, instead insist on the discussion.

Always be a team player. Remember you are there for the good of the organization, not your career, interests, or ego. A little humor and modesty go a long way.

2 COMMENTS

  1. Good stuff, John. Believe it or not, I currently sit on two executive boards and 3 separate committees, and you’re so right about the humor and modesty part. Even though my family gets annoyed at my time away from home, I’ve met some really amazing and locally influential people.

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