How Great Boards Attract Great Directors – Part One
After 25 years of searching for Non- Executive Directors in Australia and New Zealand, some features appear consistently across the boards that successfully recruit and appoint high quality directors. While a board has many responsibilities over and above the selection of directors, only when there is attention on getting composition right, can a board truly excel.
Our observations on board recruitment and renewal are offered here:
have a clear and agreed business strategy;
- Directors are all rowing the same way, although they are likely to be seeing the challenges from different perspectives if there is diversity on the board.
- Board and management are aligned and the strategy is agreed, with the respective roles of board and management agreed.
align board composition with future needs;
- Know where the organisation is heading and find suitable directors who can help on the journey. The culture and values of the company are explicit and there is a commitment at board level to live and operate by those values.
- Don’t recruit ‘like for like’ on an automatic basis, recognising that a board’s focus must always be on the future and the needs of the business will change.
allocate responsibility for succession;
- Appoint or delegate a group or committee with the prime responsibility for director succession, that is based on existing tenure, an accurate skills matrix and a coherent strategy for the company.
- Require regular updates for the whole board.
establish a timeline and a process;
- Agree and plan for timely succession of existing directors or additional directors if board expansion is contemplated.
- Allow for contingencies and start discussions 12 months prior to the need to allow for adequate planning and negotiation.
have future focused materials available for candidates;
- Allow access to strategy and financial/budget documents (with an Non-Disclosure Agreement as required)
- Have identified ambitious and challenging opportunities ahead that provide a compelling case for the right people to join the board.
look beyond known candidates;
- Search or advertise widely and go beyond the ‘usual suspects’.
- Cast a wide net to uncover directors with low profiles as well as those who are regularly in the public domain is a standard practice.
have an attractive proposition to offer candidates;
- Offer market remuneration; opportunities for involvement with the business; have good quality papers; an established calendar of board and committee meetings; some detail on the role of a director.
- Have high quality and thoughtful materials – Letter of Offer; D & O Insurance; Agreement to act as Director/ contract; Explicit performance expectations; Board Code of Conduct; an excellent on-boarding and induction program; and a suite of contemporary policy documents in plain English.
take reference checks and other protocols seriously;
- Board members are involved with confirming the suitably and ‘fit’ of preferred candidates prior to any offers being made. Culture and style are. Included as part of reference checking.
- Commission security and other checks to be completed well ahead of time as these can be time consuming – eg international academic qualifications.
engage all board members in decision making; and
- A Board is a collective decision-making body and all directors will meet prospective peers before a final decision is made. This step is communicated to the preferred/short listed candidates, who appreciate the importance of a unanimous decision.
- Some boards arrange this informally (through a number of small social meetings) others offer an invitation to a meeting, or have candidates present to the board as a final step in selection.
make on-boarding and induction comprehensive.
- Plan for year one as an induction period and ensure that a range of experiences, situations and meetings are scheduled accordingly. While reading materials is important background, it will never substitute for the lived experience of attending an AGM or visiting a site, or participating in a board sub- committee.
Please reach out to our team if we can assist you with succession or renewal of your board.