UK board of directors’ effectiveness has become critical in the UK, as the number of challenges to boards, along with the personal liability of directors, have both increased dramatically. Orienting a new director rapidly and with sufficient depth supports board effectiveness. It is a question of integration into the board’s culture: “Understanding the culture of a UK board—its delicate balance of candour and collegiality, its implicit and explicit customs and norms, and its group dynamics—is, in some ways, the most important knowledge a new director needs to get off to a fast start.”
Assuring Board Effectiveness
Successful member orientation is a key part of UK board effectiveness, according to the Belfast-based consultancy Leading Governance.
“Joining a board of directors enables you to make an enhanced contribution to the success of an organisation. But it also involves responsibilities and risks. Being a director requires a different mindset, new skills, a new identity and changed relationships,” agrees Richard Winfield, principal consultant at the Birmingham-based Brefi Group.
Winfield points to the fact that there is an increasing amount of turnover on UK boards. This is a positive sign, according to research. A recent study by London-based researcher Spencer Stuart shows that companies that replaced three or four directors over a three-year period outperformed their peers.
But Winfield also warns of the importance of ensuring continuity of policies; orientation thus becomes a crucial element in reinforcing board effectiveness.
Carefully Tailored Member Orientation
Research also shows the importance of carefully tailored orientation for new UK board members.
“Each orientation process should be tailored to the needs of the individual. Few boards had no induction process at all, but many ran only limited and generic programmes. We have found that orientation designed to accelerate the contribution of new directors encompasses three broad areas: The strategy and business of the company; board structure, processes, and role; nuances of board culture,” writes consultancy Heidrick & Struggles in a recent report.
See how a board portal can help prepare the board of directors for new member orientation.
“Though these categories are in one sense obvious, the devil is in the details. The orientation leader must think carefully about the particulars of each category, and make sure the board and management embark on the specific activities that will most effectively accelerate the ability of the director to contribute immediately.”
In the United Kingdom, it is likely to be the chairman, general counsel or company secretary. Regardless of who leads the effort, boards that get it right can expect to get the full value of the skills, expertise and leadership of new directors from day one of their tenures.
Learning the Culture of the Board
As Heidrick & Struggles point out, orientation should be carefully geared to integrating the new director into the complex culture of the board.
“Understanding the culture of a board—its delicate balance of candour and collegiality, its implicit and explicit customs and norms, and its group dynamics—is in some ways the most important knowledge a new director needs to get off to a fast start.”
The first step is to assess the new director’s skillset, and to consider which areas of the company’s operations and the board’s concerns he or she must learn to understand. Working from the references provided during the selection process, the orientation group can get a sense of the new director’s strengths and weaknesses, as well as style. Areas for development should become clear through this assessment.
The next step is to pair new directors with experienced directors.
“Because most directors, no matter how new to the board, come with considerable stature already, a formal mentoring program may not be appropriate. Further, mentoring succeeds only to the degree that both parties invest in it. What the orientation group can do, however, is to think carefully about which individual on the board might connect best with a new director. Simple measures such as seating them together at board meetings and having the experienced member debrief the new member after meetings (for example, to make clear the nuances of what transpired) can often accomplish as much as a formal mentoring program. The purpose is not to manufacture artificial relationships but to provide opportunities for new directors to get answers to questions that they may feel uncomfortable asking in a large forum.”
It’s important to remember that every director is unique, and the needs of one new director may be completely different from those of others. For example, an academic coming onto a board that consists entirely of businesspeople will need significantly more education on certain issues. Similarly, a new board member who feels less experienced than the other directors may need to be encouraged to speak up in their presence during early meetings. However, care should be taken to not pigeonhole new directors – one is an ‘academic,’ another is a technologist,’ etc. Efforts should be made to see that they all attain full participation and address all issues just as the rest of the board.
Integration doesn’t have to be a slow process. On the contrary, high-performing boards seek to accelerate integration as much as possible, with new directors at full participation as soon as possible. The chairperson and the company secretary should pay close attention to evolving board dynamics, and this will lead to adopting practices that enable new appointees to fully participate as soon as possible.
Diligent Boards Offers Customised Orientation Support
With Diligent Boards, every orientation experience can be customised not only for each customer, but for each individual end user. This means offering a variety of training types and styles, and most importantly, unlimited, one-on-one and/or in-person training.
By streamlining workflow and affording users the ability to revise, publish and distribute materials without delay, Diligent Boards maximises the administrative staff’s productivity and mitigate unnecessary complications. Allowing the secretary to grant or limit access to corporate data during transition periods like orientation and director departures benefits the administrative staff and the board alike.
Given that board portals house the pivotal proprietary information that can be at risk, the security of the portal is another critical area of evaluation. Diligent Boards has the ability to keep data safe by consistently conducting penetration and security tests, obtaining third-party certifications that prove they employ a systematic approach to managing and safeguarding sensitive company and customer information, and using a minimum of 128-bit encryption for client materials like board books. Diligent Boards protects corporate data and becomes an indispensable tool for board communication and management.
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