Speaking to HR directors at an event sponsored by Buck Consultants, Coulson-Thomas, author of books including Winning Companies: Winning People and Developing Directors and A Handbook For Building An Effective Boardroom Team, said useful board members recognise that their duty is not to themselves but to the value they are bringing to the business. But too many are afraid, he said, of looking foolish and end up being "nodding donkeys". Using the financial sector as an example, he added: "The boards of banks had the A-teams of the City establishment. But they were incapable of asking any questions. These people just went with the flow."
The essence of a good board is balance and the ability to make a decision, something a "lot of bright people are incapable of doing," said Coulson-Thomas. One of the main problems is in the recruitment of non-executive directors, he believed, as he attacked search companies for being "very superficial".
HRDs often have difficulty in influencing boards, Coulson-Thomas conceded, but this need not be the case. Building a relationship with the chairman and company secretary is crucial to gaining this influence. Those HRDs who succeed here are able to cut through the distractions and focus the board on the impact of its decisions on the customer and on differentiating the company.
BOARD-LEVEL INPUT
The HR director community has long desired to have a seat at the top table in their respective companies. Yet HRDs often lack input at board level. While some may be at the senior team level, others may be reporting to an operations director or finance director.
Based on our own experiences and comments at the HR Leaders Club event, we have outlined some suggestions for how HRDs can have more board-level input, even if they are never invited to be a board member:
- Own succession and talent management plans that are linked to business priorities
- Be the leader in corporate governance around board activity, including leadership assessment and board rotation
- Engage the top team in key people decisions and resulting HR priorities
The ownership of succession and talent management plans is a straightforward way to gain access to board-level conversations. This is an important part of risk management for a company. In concert with line management, the HRD who facilitates the process of identifying critical positions, key talent and development opportunities has a compelling reason to meet with the MD and the board.
The increased visibility around board governance provides an opportunity for HRDs to ensure board membership meets company standards. HRDs can propose to conduct regular board member assessments, leveraging a third party to combine this analysis with leadership development.
In most companies, the annual strategy planning cycle allows an HRD to engage the top team around people decisions that flow from business choices. An HRD should analyse strategy session outputs and the company financials, in order to highlight trends and challenges that will impact on people decisions, such as whether to recruit a new workforce to meet a business need or to retrain existing staff in the new direction. The sum total of people decisions that flow from the business direction will determine an HRD's priorities. Such an approach gives them a reason to meet with the MD and the board - to take them through the analysis, people implications and decisions, as well as HR priorities.
While there may not be many opportunities for HRDs to sit on a board, there is much they can input. Improving risk management through ownership of succession planning, helping to improve board governance and linking business decisions to HR priorities are all significant opportunities to influence board-level thinking. What is needed is a confident HRD armed with robust and validated proposals for the way forward.
- Anna Marie Detert is head of human capital, Buck Consultants.
