Five focuses for a board chair
In the wake of the economic crisis, the idea of a new normal lingers. It carries with it an increase in questions about the company’s future that have no clear or immediate answer.
To avoid a crisis of leadership at the board level – due to increased complexity of world as well as shareholder presence in the boardroom – new skills that create clarity, confidence and capability will assist organizations to leave behind confusion, isolation and powerlessness.
As we turn to prepare for growth, an expanded skill set can also create resilience and adaptation strategies. While many boards hire an outside expert to support the board and its committees, in some cases the skill set of the chairman will need to be expanded. Given the varied leadership roles in each boardroom, many of the roles discussed below are shared by both the chairman of the board and the lead director.
On the horizon for leadership needs at the chairman level:
Increasing board performance
One of the most difficult issues for boards in an increasingly complex business environment is dealing with underperforming directors. To deal with this effectively will take the ability to lead change along side careful planning and diplomatic communication skills. The ability to inspire commitment from the board for this task is a must.
Chairman Question: How can I improve my ability in the area of communicating objectives and expectations with a high level of interpersonal savvy?
Board succession planning
While this task is often overlooked, the chairman can take an increased role in ensuring the nominating committee has the skill set required to create competitive advantage at the board level. In addition, ensuring that this committee has the skill set to work harmoniously with increased input from stockholders and stakeholders is a must. The ability to identify any barriers to success in this committee will help ensure a smoother transition as we enter into the changes coming with enforcement of proxy access and other rules or legislative changes.
Chairman Question: How can I improve my ability to lead change?
Incorporating greater board diversity
We are entering into a time when boards will most probably be more diverse and have directors with specialized knowledge. The ability to facilitate conversations, stay at high levels as well as creating an environment of listening will be needed. New directors will challenge the way thing have been done. Facilitating constructive criticism towards overall board effectiveness requires a new or renewed commitment to receptiveness that facilitates the constructive use of the board’s energy on common goals, priorities and problems.
Chairman Question: How can I improve my ability to leverage differences?
Tone at the top
The need for board leadership around a company’s cultural issues is on the table since the Financial Meltdown of 2008. The age of stress testing and worst case scenarios is upon us. It is the role of the chairman to listen in a ‘third party’ manner and identify when the risk appetite of the board and management are not in alignment. To broach this topic with management, this will take an increased level of facilitation and communication skill for the chairman. This role is all about courage.
Chairman Question: How can I improve my ability to take the lead on unpopular but necessary actions?
Dealing with long-term and short-term tension
With the idea of patient capital on the table many board rooms will also be faced with pressure for short- term results. Shareholders and stakeholders have different and at times conflicting ideas. Managing the tension this creates will increase the need for leadership over facilitation skills from the chairman. The ability to persevere in the face of complex problems or difficulties is a must.
Chairman Question: How can I improve my ability to act decisively and make good judgment, even during crisis?
In more complex times a refined skill set can facilitate increased effectiveness of the chairman. The ability to have a flexible mindset – to relax and reframe for change – to increase the potential for new ideas before moving into a problem solution mode is critical. The latest neuroscience shows we can use our spontaneous cognition default network in our brain to unleash hidden abilities to address current unresolvable tensions and challenges. Have you ever wondered why we get new ideas in a shower – a time when we are without a specific focus? If we learn to pause long enough and allow time to let new ideas bubble up the brain is created in such a way that new ideas will come. In our fast paced culture and time sensitive agendas, to create this kind of space may be a challenge. But, if implemented by the chairman to assist him or her to evolve to meet the challenges of the 21st century, it would be well worth the effort.