A non-executive director is still seen as a luxury, others have this title but are nothing more than a form of consultant. However, a business embracing a chair or board member who is independent of the ownership or family can change the dynamic and trajectory in a way previously unimaginable.
Trying to bring this all together, taking the next step is a bit like what Franklin D Roosevelt said, “I’m not the smartest fellow in the world, but I can sure pick smart colleagues.”
Know the company’s vision. Where do you want the company to go? Define what you need the board to do to achieve those goals. Keep that in mind as you consider and define the attributes, skills, and experiences that you need of your board members.
Seek the right skills. Create a simple grid combining attributes that actually exist in the market. Draft a table with all the desired aspects of a “final” board. Fill in the table with prospective ideas for each director, ranking each in terms of depth or fit and whether that person can be recruited. Keep this list current, fresh, and ongoing, and make it an active item of discussion at board meetings.
Develop role and responsibilities for members. As Jim Collins says, “Do you have the right people in the right seats on the bus?” It’s never too early to have committees or key areas of responsibility. Do you have the best head of audit, compensation etc.? Who are the lead directors that you as CEO / MD can rely on in each critical area?
Build a culture and invite debate. Foster a culture of open feedback and independence. You want different opinions and perspectives to help you consider alternatives. Consider the culture and interaction you want from your board: passionate and intense debate, or cerebral and deliberative? You want to recruit a board that pushes you, makes you uncomfortable and challenges conventional wisdom. At the same time, you want a board and not an operating committee – so setting boundaries is important.
Break through your comfort zone. Boards tend to reach for what’s familiar and comfortable, which results in homogeneity. Knowing that, you should strive for diversity of opinion and not be afraid to go against the grain. Keeping that top of mind will help you be open-minded to alternatives you would not have considered in the first place.
Having an independent chair on the board or a non-executive director is not a silver bullet for success. Finding the right fit for the business is not easy either, when you find that person, it is not about 6 months only, it needs to be for a few years, regularly reviewing their role with them and knowing the right time to bring a new face to the table.
Good governance and a strong board room can change the business dynamic, shape the future, develop the risk appetite and help see the bigger picture. As Michel de Montaigne said, “It is good to rub and polish our brain against that of others”.