What is one key piece of advice for new board members on how to be effective?
The hallmark of an effective board member is the ability to ask management high impact questions. Such questions should yield insightful information and enable the board to execute its oversight duties.
These questions should be asked at the right time, to the right person, and in the right manner. Some questions are best reserved for a time well in advance of a board meeting and should be directed to the senior person in the executive chain rather than the subordinate.
Further, questions should be delivered in a respectful manner and aimed at gaining clarity and insight. High impact questions provide the full board with deeper insights into an issue; allowing for a good discussion among board members and with management. Additionally, astute questions signal to the rest of the board that you are prepared and engaged.
Asking the right question at the right time and place is only one part of being effective. Effective board members should obtain sufficient answers. The real work comes when you get an unsatisfactory answer. To be an effective board member, keep seeking answers until you and the rest of the board are satisfied. The annals are littered with corporate failures where, ultimately, it was revealed that the boards both failed to ask the right questions and did not follow up when they received less than satisfactory answers from management.
How critical is it to spend time outside of board and committee meetings getting to know fellow board members? Are there differences in expectations for large vs. small boards?
Discussions outside of the official board meetings are absolutely an essential part of board service. Outside meetings build teamwork and camaraderie. They may also be necessary for conducting the actual work of the board. Often, the best time and place to engage fellow board members and/or management on critical board issues is outside the normal board meetings. The size of the board doesn’t matter. There is just not enough time during formal board meetings to successfully tackle everything a director must handle in today’s business environment.
How much should you speak up at your first few board meetings? Is it a best practice to listen more than talk (to get to know dynamics, processes etc.)?
Listening is absolutely a critical skill set that you will use throughout your board tenure. While you certainly want others to get to know you and for you to become familiar with the board’s protocols and dynamics, best practice requires you to speak up when you need to do so – even if it’s the beginning of your board service. Generally, the concept of faithful execution of fiduciary duties applies equally to all board members – irrespective of length of tenure. Keeping that in mind, listening more than talking is always a good thing.
How do you balance competing priorities between your role as a director and an operating executive? How do you decide which takes priority?
Which takes a priority? Both! If you are an executive at Company A and an independent director at Company B, you cannot forsake one for the other. Before agreeing to serve, you have to consider if you have the time to do both. That consideration becomes even more important when one of the companies experience a crisis which demands an extraordinary amount of your attention. Further, this is one of the reasons shareholders are wary of directors who are “over-boarded,” which is when a director sits on an excessive number of boards. Fidelity to fiduciary duties to both organizations requires you to find the time for both. The good news is that plenty of executives have successfully taken on this challenge of board service.