An increasing number of companies and professional service firms regard board directorships with an outside organisation as an important adjunct to experiential leadership development.
They see board participation as giving their executives exposure to the issues faced by an external organisation or as a way of giving back to the community. For some, offering board-ready mentoring can enhance a company’s reputation as a champion for increased women on to boards. For others, helping their executives become board-ready develops a pool of candidates for subsidiary companies or associated non-profit boards.
Then there are those companies that provide support and assistance for partners and senior executives to join boards during the transition toward a portfolio career.
While senior executives and high-potential talent bring, in many ways, a set of skills and perspectives as non-executive directors, contributing as a board member is requires much more. Board processes, perspectives and dynamics differ significantly to corporate management. The shifts involve moving from execution to oversight and from operational tactics to strategic foresight.
Boards can be a rich learning environment where business acumen is broadened and contacts made. Being a non-executive director gives new insight into what it means to be an adaptive leader, not to mention the application of independent judgment in a team environment and having to take decisions based on filtered information.
Board service helps executives gain perspective of a sector, hone thought processes and understand the ‘business of business.’ It helps view an organisation as a connected system and how the levers of organisational capability interplay.
Sitting on a board takes an executive ‘to the balcony’ where perspectives about the short term versus the long term, increasing shareholder value versus acceptable returns on capital invested, organic growth versus growth by acquisition, values versus profit can be rethought.
While requisite board skills include the ability to read and comprehend company accounts, assess financial materials as presented to boards, know financial reporting requirements and to know an individual director’s legal duties and responsibilities, non-executive director roles also draw on the ‘adaptive skills’ of resilience and courage, independent thinking and of course the self-awareness of personal strengths, values and transferable skills.
These transferable skills are:
Strategy – directorships help fine-tune how to apply strategic thinking to strategic process and strategic choices; to articulate and link back to the core purpose.
Oversight – to oversee compliance and regulatory matters and develop a broader view of the areas of major risk to a business.
Decision-making – corporate decision making for most executives has a focus on operational needs, resource allocation or to solve short-term problems. At board level decisions are broader, more strategic, collective and require foresight.
Group dynamics – business relies on collaboration cross functionally as well as cross culturally and across purposes. Boards, including non-profits, draw on people from different backgrounds, skills, approaches, expectations and thinking styles. Skills such as empathy and emotional intelligence are needed to build the levels of trust for collegiate decision-making.
Interconnections – good directors see the interconnections and unintended consequences of potential actions. The questions they ask discover the why behind the why.
The executive journey is shaped by experience, learning and reflection. A non-executive director role can be a lynchpin of leadership development. If you are not sure how to navigate the path to board appointments then consider a mentor.