Joining a board of directors sometimes has the connotation that it’s an easy job you accept after retiring from your career. People tend to think that board members just play golf and show up to quarterly meetings to review the board package, the budget and look over financials.
While this may have been true in the past, today’s boardroom demands that its members be dynamic, contemporary and engaged “thought partners” who can accelerate the business. No longer is it acceptable to simply show up a board meeting expecting to perform an overview of the business and then not think about it again till the next meeting.
To be a good board member in today’s rapidly changing business world you need to be prepared to be actively engaged in the future plan of the business and not just worry about last months performance.
As a board member your “duty of loyalty” lies first and foremost with the shareholders. Your first priority must be the health of the entity and preserving and growing the value of the business. To do this you must actively work to “future proof” the board. At the current rate of change, the main threat to corporations is not someone cooking the books but rather the company becoming obsolete. Currently, 50% of businesses are disappearing in under a decade!
Digital transformation must be top of mind for every director. Think about your particular industry and what strategies can be implemented to augment the business. While board members typically don’t directly give orders to management, you can pose questions that can spur change. For example you might ask, “How can we take friction out of the customer journey? What can be done to ensure we have a cohesive digital presence? Perhaps revamping the website and creating a complimentary mobile app? How are we using AI/ML and RPA?”
If you are a director serving on a board that is “behind on the times” and it is painfully obvious to you that the concept of digital transformation is not resonating around the room, you should take the initiative and leverage your professional network to propose bringing in outside speakers that can provide valuable insights and learnings.
Consider suggesting a “working dinner” where these outside speakers who are leaders in business strategy (i.e. McKinsey & Company, BCG, and Gartner) can present on topics such as digital transformation, cyber-security, AI and machine learning. These are macro trends that are relevant to every company in every industry. If you don’t think you are a technology company or that these themes are not relevant to your business, than you are already at risk of being left behind and having a company that is no longer relevant.
As a board member it is important to not only be fully immersed in every aspect of the company on which you serve, but also make it a point to periodically survey the competitive landscape. Don’t just listen to your own company’s earnings call; listen to the calls of your competitors and industry peers. It isn’t enough to just read the board materials sent to you a week before the board meeting, you have to be willing to put in the time to self-educate and have a more fulsome understanding of the industry trends as a whole. The interlopers are coming. If you do not feel the heat of another runner coming up behind you then you are asleep at the wheel.
To truly understand the current rate of change and the essence of the business you must step outside the comfort zone of just visiting the company’s headquarters; visit their remote facilities, the warehouses, and the factories in the remote geographies where the company operates. Listen firsthand to the people who work at every level of the organization and hear their take on what works and what can be improved upon.
The role of the board is no longer a passive one. To be a good board member your mindset needs to be centered on being a true thought partner for the CEO. Leverage your relationship capital to make valuable introductions for your CEO to expand their network of mentors and potential partnership or revenue opportunities. Think actively on how you can be an accelerant for the business and the ways that you, as a contemporary board member, can add value to the enterprise to ensure its longevity and success for the shareholders, customers and employees.