08 May CDF Key Takeaways – First Time Directors and Onboarding
FINDING A BOARD SEAT:
- For one panelist, getting a board seat was a result of networking and building relationships over time that led to opportunities where people thought of her for the role.
- Even with a referral, her resume still went through a search firm
- One panelist wasn’t looking for a board seat, but a recruiter reached out to her
- Important to assess if your values are the right fit and whether you can be effective
- One panelist was ending his career as CFO and was looking for the next opportunity
- All about networking; who knows who
- Spoke with Investment Bankers, Accountants, Investor Relations people and this led to meeting people in private equity to get into companies that are part of investment strategies
- You should have some passion for the organization and should also bring expertise. These things should align.
- Typically, the process is directed by the directors themselves, though there may also be an internal infrastructure
- Try to spend time with other board members in advance of the first board meeting, then spend time with the senior managers of the company after the first board meeting to understand the business and see what they thought about where the company was going. You want a well-rounded experience of the company.
- Some onboarding experiences include a multiple-day onboarding training
- This may include visiting different company locations, depending on the industry / type of company
- The executive team may give an overview of the company and each of their departments (Marketing, Sales, Investor Relations, etc.)
- In some cases, new directors do not go on a committee during their first year, but instead sit in on each committee to allow them to learn what each committee does and how they interact.
- Begin with the understanding that being on a board is a lot of work. It requires a lot of time, dedication and research, and should be viewed as a service.
WHAT IS THE ROLE OF EXISTING DIRECTORS IN ONBOARDING?
- Lead directors often act as coaches and provide feedback during every interaction in the first year.
- Often the CEO or the Nominating Committee Chair takes the lead with onboarding, providing feedback and spending more time with the new member.
- Socializing is also necessary (i.e.- dinners, breaks in meetings, etc.)
HOW DO YOU FIND YOUR VOICE ON A BOARD?
- One panelist relied on her experience in working through acquisitions to find that working on a board was similar.
- Learn about the organization, learn to ask the right questions and listen carefully
- One panelist preferred to spend time learning about the voice of the other board members and how they interacted with one another.
- Listen with empathy to effectively communicate
- Do NOT be overly attached to your opinion. Be open to listening and communicating (you have other people around you who are all really smart and have opinions, so this could go wrong quickly).
- One panelist had to realize all the work that goes into preparing for board meetings and management is looking for is feedback and questions. He found that he should always be asking questions with these presentations.
- Speak-up, even it is just asking things like “What does this mean for the next quarter?”
HOW DO YOU PREPARE FOR THE “UNPREPARE-ABLE?”
- While you can’t prepare for everything, DO YOUR HOMEWORK! Read the materials provided before the meeting thoroughly and do your own research on what is happening with the company and understand industry trends.
- Focus on what the risks are, specifically the most pressing risks.
- Always hold Executive Sessions to avoid a potentially awkward situation of one being called out of the blue.
BEING ON AN EXECUTIVE TEAM AND A BOARD
- You are there to advise, not to do.
- Rule-of-thumb: Take 3-minutes to think through things before making recommendations
- Managers need to realize that board members are not thinking about the business every minute of the day like they are. The board is not management and there are certain decisions the board should not make. The board is there to think about what the shareholders would want the company to do.
- “Nose in – fingers out”
- Diversity in backgrounds, age, etc.
- Boards need to understand where the market is going and what consumers are expecting. They also need to understand how to approach changing demographics that aren’t necessarily represented on the board.
- IT Risk, Digital and Social Media, are big board topics
WHAT ARE THE KEY METRICS TO LOOK AT ACROSS INDUSTRIES?
- Cash flow
- Sense of tone: Is there clarity/communication at the top?
- What is the company trying to achieve in the next 3-5 years?
- Governance process
- Overall direction of the company and what does success look like and how are we trending toward it?
WORDS OF WISDOM:
- John: A lot of companies are looking for directors and there seems to be a desire to bring in people who are new to serving on boards. Do not jump at the first opportunity. Take time to do your due diligence and make sure you are making the right decision and that you can contribute in a way that is aligned with what you can provide and what you are passionate about.
- Vivien: Know your super powers, do your homework and participate authentically and empathetically.
- Kevin: Know your skill set and determine what companies you would target that your skills support. Do your homework and network for these companies. Be transparent and provide your point of view – it is what companies need and want.
- Laura: Understand the type of company you want to work with and know the directors you want to work with. When times are tough, you have to be able to work with this team to come to a win-win outcome. Seriously consider your time investment and be sure you are ready to commit.