Having spent a lifetime advising Boards of small and larger enterprises, I now spend a considerable amount of my time sitting in Board myself as a Non-Executive Director. It is interesting to me when I look over the meeting tables at my fellow Directors and see what they bring to that table.
I believe many Non-Executive Directors bring technical skills to the Board, and others bring their management experience having run their own businesses. This is all well and good, but I believe that being a Non-Executive Director, you need to bring a different set of more helicopter-level skill-sets. Funnily enough, I believe these skills are very similar, if not the same as those of a good leader in a business, or those necessary to run your own good small business, even though the extent of the practice of those skills is different.
Here is what I think you need to do if you become a Non-Executive Director.
* To start with, you need to learn as much as you can about the business and industry, especially if it is an industry you have not actually worked in yourself. You need to understand where the company sits in the industry and its market environment, you need to know about its competitors, you need to understand the industry’s and company’s business models. Without this understanding and knowledge how can you “direct” the company and contribute to Board decisions about growing value?
* You need to be comfortable with the company – believe in it and its bahaviours and values and business model. This has to be a company you are proud of being a Director of. If you cannot achieve that level of comfort don’t accept the Directorship.
* Make sure you get on with your fellow Directors. Understand their positions (even if not aligned with yours). You need to work with the rest of your Board and find ways to disagree and handle those disagreements in such a way that no future ill-will is borne, for the benefit of the company.
* You need to understand the line between Non-Executive Director and management, and do not cross it – many new Non-Executive Directors come from management and would like to roll up their sleeves and get into it, or discuss detail on management choices – don’t succumb to temptation. They have their jobs, you have yours. Prepare to add value to the company, not take it over.
* If you don’t have it, you should cultivate the ability to listen and be engaged while listening. You also need to cultivate the ability to keep quiet at times. Some people feel that they “need to say something” in order to contribute to a discussion, even if it merely repeats or reinforces what someone else has said. Speak your opinion to add value to the discussion, not to look good.
* Sometimes, it can be a good idea to pause before you speak – an immediate reaction can be useful, but more often than not, a pause especially if you’re not sure of your ground on the topic, makes sure you are on the right track before you weigh into the discussion.
* Always, in order to fulfill your responsibilities, have an enquiring mind. On the other side to learning to keep quiet, don’t be embarrassed to ask questions. If the answer is not satisfactory, press on until you are satisfied you understand the situation or the explanation. If it all goes pear-shaped, you will need to be able to explain your understanding of the answer to that question in your own words.
* Be aware of correct governance processes, but at the same time also be aware of commerciality, especially time and deadlines.
* Much as you would like to being a Board member, I don’t believe you can change corporate culture. Corporate culture is set by the day to day management of the company, and particularly the behaviours of the CEO. The best you can do to influence corporate culture is to appoint the right CEO – use that power well.
* Don’t be afraid of saying no to management – but provide strong reasons, not just no for the sake of a feeling. Saying no to a situation or decision, if it is properly thought out, can be a way to set the direction of a company, as in “these are the things we will do, these are the things we will not” – a values and vision thing.
* Smaller Boards may look for technical expertise from lawyers, accountants, engineers and so on, but larger and more diverse Boards need a more commercially-experienced and management-savvy Board member. Again, it is the addition of value to the table, and where in some cases value is brought by a technical understanding of the law or finance, at most times it is about running a business.
As I said, some of these skills are the same as those you need if you run your own business. What do you think? Are there skills that you need as a business owner that are different from those of a Non-Executive Director?