In comparing governance practices at Fortune’s “most admired” and “least admired” companies for Harvard Business Review, Yale management professor Jeffrey Sonnenfeld found little difference in board performance due to percentage of independent directors, financial literacy of audit committee members, or amounts of stock-based compensation. Sonnenfeld suggests that what … [Read more...]
Top 7 Challenges for Public Company Director Candidates
Over the last few years, I have heard from a number of board candidates about their biggest challenges. I have dug through my notes to share these. My hope is that the definitions and tips will bring further insights that will leverage and prioritize your time and efforts to gain a board seat. 1. Time Boards move slowly. This makes keeping in touch essential for director … [Read more...]
Onboarding: Advice for New Directors and “Fit” With the Board
One way to help with onboarding a new director is to focus not just on skills but also on cultural fit—how well will the new director fit with the way their fellow directors work. New directors and sitting directors can become more effective and influential by examining these three ideas: 1) The difference between the actual role and the expectations the new director has … [Read more...]
Top Ten Due Diligence Mistakes Made by Board Candidates
What are the most common due diligence mistakes made by board candidates? Here is a list of the top ten: Mistake 1 Framing the board opportunity as more of an honor than a responsibility. Solution: Think of the board seat as a job. Consider the hours and the task as the most significant in your professional career. Mistake 2 Not identifying the lack of alignment in risk … [Read more...]
The Importance of Asking Questions Before You Join a Board
As a board consultant, I have heard a number of stories from first-time directors who gained a board seat only to discover troubling issues ‘after’ accepting the board position. The single most important task before you join a board is due diligence. Instead of merely examining the rewards of board service, a board candidate needs to explore both the risks and rewards. … [Read more...]
3 Ways Board Directors Can Keep up with Governance Issues
How does a director stay abreast of a variety of corporate governance issues in a time of change? Directors and director candidates tell me they want to achieve impact in the boardroom, enhance their director-level education and competencies, and create competitive advantage at the board level. The challenge is how to do this in a focused manner that reduces the amount of … [Read more...]
Increasing Board Effectiveness in Strategy and Risk Discussions
"How do we increase our board's effectiveness in strategy and risk discussions?" I am often asked to provide insights and ideas to this question. Here are a few ideas: 1. Identify Training Needs Conduct a review of the board’s risk management skills and relevant industry experience. If deficiencies exist, schedule industry or risk-management training. 2. Review Key … [Read more...]
3 Questions to Evaluate CEO and Board Relations
CEO and board relations are one of the key foundations of an effective board. Trust is formed when the CEO communicates openly, proactively, and transparently. An approach that includes what the CEO is thinking and direct inquiry for board thoughts makes for a comfortable exchange. Here are a few questions to consider when thinking about your board and how the CEO … [Read more...]
Boardroom Knowledge and Experience Do Not Go into Perpetuity
Warren Buffet says, “The best way to affect the behavior of board members is to embarrass them.” While this statement may have some truth, there are better ways, to advance change for competitive advantage from the boardroom. To have the board aid in creating a competitive advantage is an important mindset. Think of it this way. In a pre-IPO company, a board may decide that … [Read more...]
Interviewing with Recruiters for a Board Seat
Your relationship as a board candidate can start with recruiters on a phone call, over a lunch or you may be called into a face-to-face meeting for an active director search. It is important to remember that how you present yourself will be viewed as how you will behave in the boardroom. Keep in mind that those getting to know you are looking at both your professional … [Read more...]