Topics:   Corporate Governance,Leadership

Topics:   Corporate Governance,Leadership

July 26, 2018

Defying Conventional Wisdom, New Directors Expected to Speak Up

July 26, 2018

Of the 358 directors who joined Fortune 500 boards last year, 128 had no previous board experience. That’s according to Board Monitor 2018, our firm’s latest installment in our annual tracking of trends in non-executive director appointments. Many challenges are likely to surprise these new directors in their first year of board service. But in my conversations with the directors I have worked with as a search professional over the years, one surprise in particular comes up repeatedly: you’re expected to speak up right away, despite being new to the board.

Conventional wisdom says that new directors should keep their heads down for the first few meetings, say little, and wait until they get their feet under them before venturing an opinion. At one time that might have been good advice. But today new directors are increasingly expected to contribute to the board’s deliberations right away. Here’s why.

The velocity of business no longer leaves room for a leisurely pace in the boardroom. In today’s hyper-competitive world, organizations must be able to accelerate performance—to build and change momentum to get results more quickly than competitors. Boards too are feeling that pressure—as a result, they are adding new competencies in rapidly evolving areas that hardly existed a decade ago. If a new director was brought onto a board for his or her expertise in artificial intelligence or cybersecurity, for instance, the group can’t wait nine months or a year before hearing from that new board member on the subject in a substantive way. Further, even if initially the new director has been sought to fill a hole in the board’s expertise—in a market, a geography, a discipline, and so on—he or she is likely able to contribute in many areas, not simply function more narrowly in that area of specific expertise.

Onboarding practices are increasingly designed to enable new directors to contribute right away. These practices will likely include setting up time for a substantial conversation between the CEO and the new director to inform that person of how management views the company’s most critical challenges. He or she may be briefed by the chief legal officer and the lead director and chair. The new director may be encouraged to contact other board members and management, including senior staff and key business unit heads and to visit company sites and plants and facilities. And that new board member may be paired with an experienced director who will help him or her acquire some “cultural literacy” through post-meeting debriefings. Boards that take such care with onboarding have the right to expect that they will get the full value of the skills, expertise, and leadership of new directors from day one of their tenure. (That applies to the boards of some nonprofits, too, but a recent study conducted by our firm found that many nonprofit boards do no onboarding or do it poorly.)

New directors may have been brought in to help shake things up. Now that the business value of diversity has been widely recognized, some boards are seeking to become more diverse than ever—in background, age, national origin, gender, ethnicity, and experience. Unfortunately, if the new director is bringing something clearly different to a homogeneous board, he or she may feel too intimidated to speak up right away. Be sure to encourage new directors to speak up. Their appointment suggests that the board recognizes its need for other voices.

The company may suddenly find itself in a crisis that requires all hands on deck. Crises come in all shapes and sizes—activist investors, defective products, hostile takeovers, executive misconduct, natural disasters that threaten operations, and many more. From the point of view of directors, they all have one thing in common: they threaten the stock price and sometimes the continued existence of the company. There are few situations in which the director’s fiduciary duty to the stockholders is so starkly in play as in times of crisis, when all directors need to be heard. Be ready to hold new directors to task when all hands are needed.

Remind new directors that it’s their duty to speak, even in the face of opposition. Once in a great while the company and the board may be about to embark on a course that everything you know and believe tells you is likely to have dire consequences—for the brand, the business, or the stakeholders. Seasoned directors are aware of this, and they should iterate to new directors that if they sincerely think that remaining silent would do a grave disservice to the company and their colleagues, they owe it to the company—and to their own conscience—to offer their perspective. If they do it with visible concern for stakeholders, a manifest passion for the business, and genuine good will toward those with whom they disagree, they will deserve—and likely earn—far more respect than if nothing was said.

Not surprisingly, the encouragement to speak up should also come with some caveats: No talking just to hear yourself talk. No playing the expert card. No misplaced idealism that sends you tilting at windmills. No playing the gadfly, the nitpicker, or the contrarian—three ways to make a negative first impression and virtually ensure that your colleagues tune you out now and in the future. New directors should also be reminded that they are not the CEO or management.

In order for new directors to make themselves heard, they need to have credibility. Credibility is gained by building meaningful relationships with the other members of the board as soon as possible. That is perhaps the second most surprising takeaway for new board members that I hear. It’s not that they don’t believe in relationship building; it’s that they don’t think it can be done quickly given that boards meet infrequently and the members are usually widely dispersed. But those obstacles, coupled with the expectation that they will contribute out of the gate, are all the more reason to pour effort into connecting with new colleagues.

New directors who have been paired with a more experienced colleague should take full advantage of the opportunity to learn the ecosystem of the board, where the centers of power lie, and how consensus is typically reached. They should have dinner with members who live in their city or who might be visiting in the near future. They should schedule phone conversations with others. And while these encounters will help new directors get to know their colleagues as people, the focus should be on the concerns of the board and the company and how to add value. By building respect and trust at the outset, directors will feel far more comfortable when communicating —and ensure that as a director, your voice will be heard.