There is a fresh, dynamic talent pool of quality directors available with phenomenal skills and capabilities that can make a real contribution at board level. Business First speaks with Kylie Hammond of the Director Institute about what it takes to thrive in a board role.
Kylie – what led you to found the Director Institute?
I have been involved in senior level recruitment, executive coaching and mentoring for twenty years, and recognised that there was a real gap around connecting fresh director talent with board opportunities. The board search market in Australia is extremely limited. It’s very tired. It’s the same people doing the same searches and they’re tapping into only a fraction of the true board director talent pool that is available in this country. So I wanted to provide up and coming, emerging director talent with a genuine opportunity to get their first, second or third board position.
My aim is to refresh boards in Australia so that they are constituted by more than the same group of directors that are often driven by the old school business network.
A good board director might have quite a different profile to many of those highly regarded amongst the current crop of board directors. While accountants, lawyers, ex-professionals and service firm executives have traditionally found their way onto boards, Director Institute looks for people with a broad set of relevant skills that will help the company on its journey.
Typically we try and look for people who have experience in strategy. The board is there fundamentally to oversee the strategy of the organisation, so people who’ve had exposure in forming strategy and executing strategy are highly sought after. We also look for people who really understand risk management.
The board’s main task is to oversee all areas of risk – financial, human capital, resources and reputational risk of the organisation. Strategy and risk are the really hot skill sets, however a diverse range of skills, experience and perspectives around the boardroom table is also important.
How can a Board Director have a positive impact on the board?
The role of a good Board Director involves a lot of hard work. The days of just swanning into a board meeting and not being prepared, or treating it like it’s a casual arrangement are well and truly over. You really need to be organised and thoroughly prepared for your board meetings and you need to be an active contributor. It’s vital that you have read all of your pre-meeting materials, and that you are prepared to debate and challenge the business strategy to ensure that it is right for the business. However, there is more to providing input as a board member than hotly debating every issue. Knowing when to speak up and when to listen in the boardroom is important because those personal dynamics – those relationships, are very important to the way in which decisions are made. Every board member has been chosen for a reason, so enabling every voice to be heard is a crucial part of ensuring that the best decisions are made.
How involved in the business should board directors be?
People who take a professional approach to a board appointment and have a strong work ethic do well. But it’s the director that goes the extra step to fully understand both the governance and operational issues of an organisation that perform the best.
Obviously there’s a necessary demarcation between the roles of a board member and management – and certainly board members aren’t expected or encouraged to become meddlers in the business, but they do have a legal and fiduciary responsibility to be across what’s really going on in the business and, at times will need to make their own independent inquiries.
What does it take to get onto a board?
There are a variety of things that people need to consider if they’re thinking of developing a board career or looking to expand their board directorships. The first thing is to really understand your personal value proposition – or in other words, understand where you’re going to add the most value to the board, and importantly be able to clearly articulate that to prospective board employers. Then, you need to make connections with the available opportunities in the market. Many board roles are not advertised; so networking with other chairs, or directors is vital if you want to find out when new opportunities become available.
Organisations like Director Institute are helpful in this respect as they focus on connecting directors with tangible, often exclusively available board opportunities, and with other directors.
CEO interaction with Boards – how much is too much?
Many CEOs rely on a really good chair for mentoring and advice and as a sounding board for key business decisions. Very rarely would you see a situation where contact with the board is limited strictly to monthly board meetings. You would expect the chair and the board of directors to have a healthy dialogue with the chief executive on a regular basis. The CEO should also feel that they can reach out to board members or the chair, as and when he or she requires.
What actions should people wanting to have a board career take?
Understanding how the market works and how others have secured their first board position is really valuable. Investing the time and energy getting appropriate qualifications and education is also crucial. The people who are serious about this really do take that time to clearly articulate where they’re going to be able to make that contribution and in due course market themselves appropriately. These days you need to market yourself like any product or service. You need to ensure that your brand is clear across all your collateral including online profiles such as LinkedIn, your Executive Resume and Board Resume. Most recruiters, other board directors, or even colleagues who are meeting you for the first time will look you up online first, so make sure that you spend the time to position yourself correctly – and professionally!
What’s the right amount of time to spend on a board?
Typically board positions are appointments for a period of time and it will often be one to three year terms. Boards need to renew because the requirements of a company or an organisation change over three to five-year periods, and fresh perspectives, and insights are key to good governance. I believe that the performance of directors needs to be reviewed, along with the skills and composition of the board, to ensure that the right people are around the table for the company at the right time. While renewal is important, these roles shouldn’t be seen as short-term appointments. It’s really important that there is stability for given periods in the boardroom.
There are obviously risks associated with becoming a board director. How can you mitigate that risk?
Director insurance has become a more essential service in an era in which, far more than in the past, courts are prone to find that the buck actually does stop at the top. Understanding the risks associated with building a board career is critical, and part of any director’s professional risk management strategy should include adequate D&O insurance cover. The Director Institute has partnered with Insurance House to develop an exclusive personal director and officer’s insurance policy. Companies will typically insure their board of directors, but there are limitations on that insurance and there are many instances where a board director would not be insured. Effectively ‘Director Guard’ is a gap policy that addresses some of the gaps that occur in the bigger, overarching director and officer’s insurance policies.
Board recruitment –what is the state of the market?
There are literally thousands upon thousands of companies; small to medium enterprises right through to quite substantial private and publicly listed companies that all seek board directors or advisory board members every year. In addition to that you have a very significant not-for-profit, sports, arts, community based sector that also seek board directors. Each of these organisations will be looking for particular skills, expertise and knowledge to add to their board, so there is no one ‘type’ of person that they’re looking for. The real challenge for board directors is getting connected to the opportunities at the time when they’re available. It’s not as transparent a process as people might think, and certainly you need to be well networked to find out about the opportunities as they arise.
For you personally, what are the pros and cons of running your own business?
I regard setting up my own business as one of my most significant achievements to date. It takes a lot of courage to move from being an employee to launching and starting your first business. You really need to take a leap of faith because you’re no longer going to be able to rely on that regular pay cheque.
It’s important to remember though that things won’t always go smoothly. Actually some of my failures have resulted in some of my best achievements, in that I learned from all the mistakes I’ve made along the way. I’m a very resilient person and when things have not gone so well I’ve been able to pick myself back up and get going again.
What is your secret to success?
I always surround myself with people who are smarter, wiser, and more experienced than myself and I think that has probably been the key to my success.
What are your plans for the future?
Continuing to build and grow Director Institute is my priority. This is a real passion of mine – to really improve the quality of directors that are in the boardroom and I want to really open up that talent pool. That is my focus and where my passion lies and we’re having a lot of fun doing it. BFM