The role of board director is perhaps as complex and challenging as it is highly desirable. For many it represents the capstone of their career. It is an opportunity to contribute wisdom, knowledge and expertise as well as to learn from other esteemed and accomplished individuals. The position is aspirational albeit not always accessible. This makes it all the more alluring.
We live in times of great change to the expectations and responsibilities of board directors. This has done little to dampen interest in the role although those aspiring to it need to really understand what they are signing up for. This is truer today than ever before.
As mentioned above, the role of board director is complex and in fact can fluctuate somewhat depending on the stage and state of the company and the issues it is facing. Nevertheless there are certain elements of the role that stay constant (or at least they should). These three “D’s” are core to all director work and should be identified and recognized as such (they are, by the way, in addition to those “Ds” that are typically associated with the role of Director: Duty of Care and Duty of Loyalty):
Board directors are involved in a variety of high level activities such as recommendations on strategy, hiring and perhaps firing a CEO and even evaluating capital investments. Board directors must be able to understand, synthesize and offer an opinion and insights on volumes of information. Underlying all of this is the necessity for discussion. And not just any discussion, but constructive, thoughtful discussion that comes as a result of being well-read and informed about the issues and challenges at hand. As I have often said before, boards are teams that must function together even though they are most often not together. None of this can happen without solid and robust discussion both with the board in its entirety as will as in sub-groups such as committees.
It is in those situations where for one reason or another discussion does not take place or is superficial that problems can begin to fester. The best functioning boards value the input of all of the directors and encourage contribution to discussions by every director, not simply those with the most tenure or biggest personality.
Perhaps this category should be called “Healthy Debate” rather than simply debate because there is a difference. Board directors need to engage in debate that is governed by constructive deliberation and exchange. Debate simply to debate does no one any good. Disagreement for its own sake is a waste of valuable time and resources.
Healthy debate entails different individuals examining problems and questions, each from their own vantage point and with consideration of their own unique frames of reference. It requires a fortitude and willingness not to surrender just for the sake of moving the discussion along. At some point of course debate should yield to decision-making (more on this below) but when done right, the outcome is far superior to that which any individual could have come to on their own.
“…A main difference between those company’s that are successful and those that are not is their ability to execute. I believe the same to be true about decision making. Like execution, decision making is essential to moving forward. Decision making is also fundamental to the work of board directors.”
Some years ago, Larry Bossidy the former Chairman of Honeywell and Ram Charan, the esteemed Author and management guru wrote a book called “Execution.” To overly simplify, they argued that a main difference between those company’s that are successful and those that are not is their ability to execute. I believe the same to be true about decision making. Like execution, decision making is essential to moving forward. Decision making is also fundamental to the work of board directors. To discuss and debate without making decisions is like spinning wheels in mud! Progress is stalled and evolution as well.
Board directors by definition are individuals with some experience under their belt. They have succeeded in some way in their career and it is likely that they know how to be decisive. The challenge can arise when these same individuals get into the boardroom and fall into one of several common traps: assuming someone else will take responsibility for the decision, fear in making the wrong decision, analysis paralysis or becoming complacent as a result of the dilution of responsibility that happens when part of a group. Needless to say, these are complex challenges that are beyond the scope of this article but for now suffice it to say that becoming aware of any tendency to become stalled is an important objective for all directors.
Being a board director can be positively rewarding and enriching. However, being an inadequate director or affiliating with an impaired board has never had more consequence or the potential for exposure than at present. Heed to best practices! Your fellow directors will thank you for it.