By Paul Dubal, Governance Coach
You have achieved the coveted board position that you have worked so hard to secure. Congratulations! Now it’s time to get board ready. You can tell a lot about the type of experience you are going to have as a board member by the induction or orientation plan that the organization offers. Some enlightened organizations have processes in place that ensure you can hit the ground running, and I truly believe this provides the knowledge and confidence to set you up for future success.
Other organizations have given me a thick, dusty manual and said, “Read this, it has everything you need to know,” with a publication date preceding Sarbanes-Oxley! This blog provides a brief overview of some minimum requirements for induction and how you should approach the valuable period of settling into your new board.
It’s important to recognize that directorship and management are totally different types of role. A good induction plan will pay particular attention to helping you manage this change in emphasis and relationships. The aim of the first three months is to provide you, the new Director, with the information you will need to become as effective as possible within the shortest practical time. Induction should include developing an understanding of the nature of the company’s business and the markets and environments in which it operates, its key personnel, customers, and supply chains, as well as the company’s main stakeholders.
The Chartered Governance Institute (CGI) recommends that you should expect to make yourself available for an additional 10 days for the induction process. The induction process can be broken down into two key parts 1. meetings and 2. documentation.
- Meetings – should be held with key personnel in the organization, such as the Board Chair, the Chair of any committee you serve on, the CEO and key figures in senior management. You should prepare a list of questions so that you can use that valuable time with them to zero in on the information, knowledge and perspectives that will help to inform your understanding of the role. Some companies also suggest meetings with key stakeholders, for example institutional shareholders.
- Documentation – can be provided electronically or by a traditional paper-based binder, and it should contain a range of materials that will deepen your understanding of the company, the industry in which it operates and the wider macro-environment. This includes an understanding of the board operations. I usually like to see the board minutes for the last 12 months to get a flavour of the discussions and an insight into the board dynamics and culture. The appropriate documents are designed to build your understanding in a number of important areas: the constitution of the company, an understanding of your fellow directors, board and committee structures, the policies and procedures across the organization, the organization’s risk appetite and attitude toward risk, continuing professional development, and the organization’s wider role and purpose such as market share, reputation, and industry positioning.
Remember that directorships are normally for three years, with the expectation of renewal for another three years. Six years is a significant commitment, and you need to think carefully about the contribution can you make and understand that the responsibilities of a director should not be taken lightly.
When you sit on the board for the first time, be prepared to ask basic questions and to challenge and take advantage of your temporary status as a newcomer and establish your reputation as one who takes matters seriously. The above is a minimum baseline and The Governance Boutique, an expert in getting you board ready, can guide you to ask the right questions and ensure that you get off to the best possible start as a director. Contact us to advise you in the induction process, so you don’t just hit the ground running, but positively sprinting!