Onboarding Guide For New Directors

The role of the board has expanded significantly from the 1970’s traditionally less engaged oversight model where directors provided “rubber stamping” of management recommendations. A modern board must be a competitive asset and an accelerant for the business.

Directors must not only perform oversight, but they must add a perspective that helps move the company forward.

As a new director, you may be wondering how you can quickly come up the learning curve so you can begin contributing and adding value.

Immerse Yourself In The Business: As a new director you must dedicate a significant amount of time to learning the ins and outs of the company. Of course, quantitative attributes such as the company’s financial performance, market share, etc. are critically important; however new directors must also take time to immerse themselves in the qualitative aspects of the business such as company culture, employee sentiment, and reputation with consumers. Use active listening to absorb and really understand the company strategy and overall framework.

Understand The Operating Environment: Familiarize yourself not only with the internal makeup of the company, but also with the external operating environment. There are a number of external factors that deeply impact the company (geopolitical trends, supply chain issues, macroeconomic trends, regulatory requirements, etc.) and it is important for directors to be appraised of all variables.

Familiarize Yourself With Boardroom Dynamics: As a new director you may be eager to jump right in and contribute to discussions. However, it is important to first be an observer and an active listener. Understand the cadence of conversations and observe how your board colleagues interact with one another as well as management. A Lead Director should seek to be sure everyone’s voice is encouraged and heard. Look to speak up and contribute in your area of specific expertise.

Have Clearly Defined Roles And Responsibilities: While expectations around the role of the board have risen, it is important for directors to understand their contributions must not cross the line from providing oversight to overstepping into managements territory. You are not an executive of the company; it is not the role of the board to operationalize the strategy.

Being An Effective And Thoughtful Contributor

Of course, you need to read the materials that the company will supply you. This will be in the form of a board book that will cover all of the content of the agenda and the board meeting. There will likely be some committee work: compensation, audit, and governance (being the normal three standing committees). You’ll likely serve on one or two of those committees, so read your committee work carefully.

Board books and committee work are table stakes.

To be a great board member you must self-educate and be fully informed about the company’s current status. Look at financial analysts’ reports. Get a copy of your CEO’s report to the analysts from the quarterly reports. You should do research on industry insights about your company’s sector that are in the marketplace and compare how your company stands against competitors. Your company likely has a lot of valuable information available on their website and press releases that you ought to familiarize yourself with.

Also, take the time to seek out and immerse yourself in the market research, not the financial analysts’ research, but the market research on your company and your main competitors.

How To Engage During A Board Meeting

The big mindset that you should have as your guiding compass when you contribute and participate in the board dialogue is that you’re there to be a competitive asset for this business; you are an accelerant. I find it works for me to think as if I am the CEO and ask myself, what are their challenges? You should be mentally problem solving about how the business grows, innovates and goes forward, how it solves competitive dynamics, how it thinks about the risks that it may not have anticipated. Your role is to be a thought partner.

It is not important for you to be heard and to speak often… As a new board member, try to keep yourself to three comments, maybe five. Do not chime in just to agree with people (that does not move the discussion forward). Do not go way off topic in your questions—be thoughtful in the three, maximum five, points you want to make. You want to be able to contribute useful insights; you shouldn’t be talking just for the sake of making yourself visible or known in the boardroom.

Additionally, sometimes your role is to stress test the logic in a constructive way; you were likely recruited to the board because you bring a specific background / skill set. Your contributions should be in line with your specific skillset as this is where your thoughts are most valuable.

How To Onboard Effectively…Tips For Management

When preparing to onboard a new Director it is important to have a structured plan and process in place.

Be sure to clearly set the tone and expectations for what the new Director should plan to learn during their onboard process and how quickly they are expected to begin contributing to board discussions.

To onramp new Directors and provide context around the current board members personalities consider hosting “ice-breaking” exercises and board dinners to provide a natural way for new recruits to form bonds with the existing members. Cohesion and unity are a critical and foundational element of any high functioning board of directors.

Consider bringing in outside experts / speakers and hosting continued education seminars for the board. New members will appreciate the educational touchpoints and seasoned Directors may enjoy the opportunity to refresh their knowledge and/or have their existing ideas challenged. This is an opportunity to spark connections and discussions amongst the entire board.

Specify who in the company will own each aspect of the onboarding process and personalize the onboarding materials / meetings to each new Directors needs and experience levels.

Have someone from the legal department review and discuss the D&O (Directors & Officers) liability insurance and the insider trading restrictions as well as give a walk through of the board portal software.

Designate a person on the team that can share a comprehensive overview of the company’s strategies, overall performance, KPI’s, competitor insights, regulatory environment, and key financial information. It would also be helpful to have a long-time employee share their institutional memory and give an overview of the company history. This knowledge will be critical to helping a new Director feel integrated into the company.

  • PRINT: