Last month we provided a checklist on being an effective director. This turned out to be one of the most popular articles we have published, with lots of comment from readers. This got us thinking – why? Below we’ve pulled together the comments and synthesized them with our own views into 6 major themes:
- The first and obvious point is there is a lot of ambition to become a director. It’s still seen as a real career aiming point, even though the rewards are not always obvious and the legal liabilities onerous.
- ‘I wanted to test my director against your checklist’. For many managers they do no hold their Director in very high esteem, our summary has given form to their frustrations.
- It seems that for some, the Director role is a function of position not action. The objective of becoming a Director has been achieved, that in itself is enough for some and their direct reports see it clearly.
- We also learned that for many Directors there is no clear mandate between their functional role and that of being a Director. Some were offered IOD training but many were not. As you might expect, this issue was more prevalent in Private, rather than PLC organisations
- Another common issue in Private, proprietor-led companies is the promoted, loyal employee problem. Often a successful, long standing relationship between an owner and key lieutenant is ‘rewarded’ with a directorship. The problem is the relationship doesn’t change, the new Director now having the right to see everything but feels embarrassed to ask, the owner carrying on as before, perhaps still with too much informality around procedure and board process. This problem can be especially acute when the employee director joins a board of family/shareholder directors.
- The long ago promoted Director who acts as an obstacle to progress. Experience is only of any value if it is leveraged effectively. If not, experience can be as much a liability as asset. It is critical Directors stay up to date and recognise their previous experience is a wasting, not growing asset. In this world of discontinuous change, insight and innovation are much more significant attributes for a director to have than just rear-view mirror experiences.
The major learn we have got from this thread of conversation is that the boardroom is rightly seen as a major driver of competitive advantage, but for many organisations they need to do much better.