Sitting on a board of directors does not suit everyone. We may not all have the same ambitions or motivations, and nor do we all define success the same way. When I was young, I perceived boards in two ways. The first was corporate or company boards, where I imagined older men sitting around and making difficult decisions about companies. Next, I saw non-profit boards as a place where women sat around and planned fundraising events.
Public awareness of what board service really is hasn’t changed much over the years, whereas it is only recently that examples of what boards really do have been highlighted in the media. This shift in openness is mainly due to the awareness that companies perform better when there is a fairer, more balanced representation of the company’s stakeholders. Yes, business leaders have finally realised that you can build a more successful company if the people at the top better understand the needs of its employees and customers.
Interestingly enough, this corresponds with the need for boards to demonstrate greater accountability for their actions and recommendations, and it is fair to state that the need for more robust boards did evolve after the requirement for greater accountability.
The board of directors plays a lead role in how businesses or non-profit organisations function. They work as a unit, like a sports team or an orchestra, to influence and manage the requirements of making an organisation successful and for better stakeholder management. Some of the key areas of responsibility include governance, strategy, oversight, and direction.
What Is the Role of the Board?
1. The Board hires the CEO (and mentors and evaluates CEO performance).
Company boards are responsible for hiring and firing the CEO of a firm. This means that the reputation of the CEO’s performance reflects on how good a job the board did in choosing and supporting the right CEO. In 2010, Nokia’s board ousted the ever-popular CEO responsible for the company’s success, Ollio Pekka Kallasvuo, and replaced him with Stephen Elop, a former Microsoft executive. Elop then switched operating systems to the Windows platform, and it all went south.
2. The board shapes the strategy using the mission and vision (and ensures that it is implemented).
No large-scale strategic decision by any company is made without the approval of the board. We all remember Blackberry, the pioneering Canadian brand that brought our e-mails into our pockets with incredible ease and strong security. When RIM’s board of directors did nothing to help formulate a new strategy as the iPhone emerged into the tech scene, Blackberry paid a high price. The iPhone revolutionised the industry with touchscreens and apps. In 2009, Blackberry had sales of over USD$ 10 billion and, by 2016, the media started to report on its demise. This failure will always be seen as a gross board failure.
3. The board is responsible for financial compliance and ethical oversight.
In 2015, Volkswagen faced ‘diesel dupe’, where it was discovered that the company implanted a device to detect when emissions were being tested, so it could temporarily improve emission results. The scandal ultimately wiped out USD$ 26 billion in shareholder value. The issue was linked to poor leadership and bad governance, and it was the board that faced the main criticism.
What Is Your Role on the Board?
As mentioned before, becoming a board director is not a decision to be taken lightly, and it needs to feed into your own motivations and ambitions if it is to energise – not drain – your purpose. That being said, if you feel that you could and would contribute positively as a member of the board, definitely go ahead!
It is extremely rewarding to have direct influence to improve an organisation that you are proud to support. Board service is an opportunity to contribute your talents and know-how in a meaningful way that is recognised. For many, board service has been a sign of expertise and respect where they feel it highlights their capabilities and provides opportunities that do not require C-suite expertise. The complexity comes in when you realise the role of the board is not to operate the business, but to advise, encourage, and scrutinise the activities against the deliverables and strategy.
Women and Boards
As women, we know that we have been underrepresented at the table of power. The use of the term ‘power’ here doesn’t only mean to be strong or naturally powerful, but to effect, influence, and control how and when decisions that impact organisations and corporations are made. Whether or not we want the responsibilities and duties that come with being on a board, generally, we do want the effects of all board decisions to represent our needs fairly. We want organisations – both profit and non-profit – to include the concerns and needs we hold, whether regarding pay, equity, maternity cover, flexible working, safer work environments, and so on.
Being on a board does not have one unified look and feel, either. There are already so many egos in the boardroom – no one is advocating for more! However, you can and should bring your A-game to the table. Sometimes, being in a board room is like being in a debate competition. With the plethora of personalities and ideas in the room, you must listen, respect, and nurture ideas, while delicately and purposefully expressing your own. There is always room for the humility.
Some board members are number junkies who really get finance and relate everything to spending and making money, while other members are driven to review and make sense of data. I have seen board members who are driven by compliance, ethics, and keeping the moral compass on track, while others like to look at the whole picture from the top down. Everyone comes with their own style, but strives to work as a team to support the company.
For more insights on what’s involved in board service, read Audrey’s So You Want To Be A Board Member for all the details of the different types of boards and what’s exactly is involved.