Company boardrooms have undoubtedly evolved over the past twenty-odd years, but the human characteristics and traits needed to be an effective board member remain largely unchanged. A lot can be achieved with trustworthy, capable individuals, something which, in my humble opinion, is truer today than it has ever been.
Boards now average around ten members. That seems reasonable. You don’t want too large a board but you need enough people to cover the range of skills required and to have meaningful debate and challenge. Full-time chairmen are generally in their posts for about seven and a half years and part-time about four and a half.* There’s also been an increase in female board members and members from overseas.
For me though, it’s not about quotas and averages, but rather about the individuals and what they bring to the table. For example, how do they behave when under pressure? It’s a question that we often see asked of top sportspeople for example, but few of us actually witness it in daily life. In my 25-plus years in this job, I’ve been exposed to many people going through a really tough time. Often they are dealing with a business that is perceived to be failing, enduring severe corporate pressures, or facing financial collapse.
There are many ways that human beings react to situations such as these. Management teams can be dressed up by their corporate advisers and PR hand-holders, but in reality people in top management have emotions and feelings and can buckle in the same way as any other human being in difficult circumstances.
Four key characteristics come through time and time again in the best management teams I’ve worked with. These are the ability to focus on the job in hand, identify the key issues that need to be dealt with, accept help when it is offered, and crucially surround themselves with a team (often in an executive capacity, but certainly the non-executives on the board) who are able to provide help, support and sage counsel. Board members with these characteristics face their challenges head-on and do not shy away from difficult conversations. They stand a far greater chance of overcoming their problems and seeing their business recover and then thrive, often achieving extraordinary results.
The first port-of-call for me when getting to know a new company is to meet the key people, primarily the chairman and the chief executive. In any crisis the CEO’s relationship with their chairman is often the critical one. A non-executive chairman runs the board, the CEO runs the company. It is important that the pair get on and have a mutual respect but they don’t have to be best buddies. Their relationship is critical though because time and again we see crises in companies addressed effectively when the CEO and chairman operate in partnership. The wider board is also crucial in providing support to an executive team when life gets rocky – which is why meeting as many of these individuals as possible is so important.
Soothing power of tea
What is sad though are the times we see executive teams fail to get through difficult periods because they are unable to accept help or advice. We’ve seen many a hapless chairman and/or CEO fail when they allow their own sense of righteousness to take over in times of stress. It is difficult making decisions when everyone is watching, however there are often very sensible moves that can be made to help ease a crisis. This only works though if those at the helm come at the problem without a desire to do it all themselves. In the vast majority of cases where we see failure we see the same traits exhibited – and it’s a crying shame, because so many of these are addressable with a little thought, humility and a good chat over a nice cup of tea.
*Source: Spencer Stuart UK Board Index 2014
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