Saturday 28 April 2012

Are new director appointees a burden to the board?


When I was reseaching my fourth book, The Twenty First Century Board, it was put to me by a prominent and experienced chairman that a new non-executive director can take a year to settle into the new role, learning how the company operates, the nuances of the corporate strategy, the dynamics of the board and the personalities of the key players in management. As well as many other things.

I thought it was as odd thing to say - surely a board needs a new director to be more actively engaged a lot earlier? And I started to think about how this could be done.

As part of my research into "Leading for Diversity in the Boardroom" I considered the three main parties who are responsible for ensuring that a new director can start making a contribution at the board table from their very first meeting. They are: the chairman, the board as a whole, and the new director.

Often a new non-executive director feels that the most appropriate way to behave in
the first few board meetings is to remain quiet, to listen and to participate in the
discussion only if they have something valuable to say.

The underlying motivation for this behaviour is the new director wanting to ‘fit in’ and not dominate proceedings or exhibit other behaviours that the group cannot tolerate.
Ironically, this behaviour can send the wrong message. If the other board members have heightened expectations about how the new member will add to the collective
value of the board’s composition they will be disappointed with the silence. They
would prefer the new director participates in board discussions immediately.

Obviously the new director takes a risk with whichever approach they adopt.

I'd welcome comments on the experiences of other directors who are new to boardrooms or from those who remember what their first board meeting was like.

More about this topic can be found in my article, "Cultural Governance: ensuring 'fit' in the boardroom" which was published in the refereed governance journal, Keeping Good Companies, in August 2011.

In subsequent posts about "leading for diversity in the boardroom" I'll discuss how a chairman can avoid the burdens associated with inducting a new director.

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