In the final governance article we look at the issues facing HRDs seeking to create NED careers and increase influence with boards. Given that an HRD has key capabilities in the areas of executive career management, talent development, remuneration, culture and behaviour, what is holding HRDs back from NED roles?
The strategic play
The first arena is that of strategy. NEDs need to be able to assimilate, challenge and support the strategic deliberations of the CEO and the executives. Generally, the HR function and HRDs are not acknowledged in the wider business community for their strategic thinking.
Consequently it is often relegated to an operational ‘strategic implementation’. HRDs who want to be seen as strategic are required to do something different related to their education, experience, skills and perception of their skills. While this can at times be only a perception issue, it is nonetheless real. A former CEO and experienced NED recently said that he failed to see the relevance of a HR background to a NED as such people were purely ‘operational’.
While there are many growing areas of corporate governance, as discussed in the first article of the series, a core requirement of a NED remains the effective challenge of the business performance, financial planning and financial engineering of the company.
The HR community has many strengths around communication, mediation and negotiating skills, which are valuable in the context of board dynamics. However, in order for HRDs to take their place at the board table as a NED, there can be no lingering doubts as to their financial and commercial acumen.
As part of a board they would be responsible for the whole business, without a functional responsibility to fall back onto. Consequently the actual and perceived lack of financial and commercial nous of the HRD community is a real brake on their success and development.
What does the HRD bring to the table?
HRDs are trained, experienced and knowledgeable in a broader range of expertise than many, which is extremely useful to a board. HRDs manage the organisational policies and processes that mould corporate culture – setting benchmarks for performance, articulating standards of behaviour and competence, directing employee training and interventions and monitoring engagement throughout the system.
Understanding how policy, procedures and practice work (and where they don’t work) is a key attribute of an effective board and provides insight into the realities of corporate values and people performance on the ground.
Most HRDs will also have been formally developed and trained in the art of mediation and communication, to ‘speak truth to power’ and in helping leaders to address their ethical style, behaviours and emotional intelligence. Discussions on highly sensitive subjects such as pay, promotion, personal development, ethics, and succession require a trained, experienced and confident understanding of human behaviour and personality.
All to play for
The opportunity for the HRD to interact with the board is currently higher than it has ever been, with the scope to become a trusted advisor equally high. Finding the right balance between implementing good corporate governance alongside the strategic needs set out by the chairman or CEO and their advisers requires a level of influencing, organisational skill, shaping of strategy and networking that is well within the range of HRD capabilities.
Additionally, the strengthening of corporate governance frameworks increasingly recognises that behaviour, culture and long-term sustainability are central to board life, and thus to the whole organisation.
Whether the HR community grasps this opportunity and overcomes any perceived hurdles, and whether the HRD route to the boardroom becomes a well-worn track or occasional lonely stroll remains to be seen. To paraphrase the words of a renowned ancient scholar: “If not you, who? If not now, when?”
Helen Pitcher is chair of Advanced Boardroom Excellence, a consultancy that focuses on individual and collective director effectiveness