How to be a better board member
What to do when you get a position on a strategic board.
An in-house counsel’s career path often includes working with a board of directors. For many, it is part of the job description: they are the liaison between management and the board, responsible for ensuring the integrity of the governance framework and compliance with legislative requirements. In addition, increasingly more lawyers, like me, are interested in another capacity: serving on a board.
Serving on a board can be a fulfilling experience in many ways. It can help you develop leadership skills and, particularly when serving on not-for-profit boards, support a cause you believe in and give back to the community in which you live and work.
Over the last few years, we have seen a great deal of continuing professional development for in-house counsel on how to obtain board positions. Board positions are considered coveted roles for advancement, and these offerings tend to target lawyers from diverse communities, such as myself.
This article focuses on strategic boards, specifically looking at what to do once you obtain a board position. How do you ensure you are adding value to the board that you are supporting? And how can you translate your experience to becoming better at serving your employer-client?
Board training: Why?
There are some well-known training opportunities that exist for potential board members, such as those offered through the Institute of Corporate Directors (www.icd.ca), onBoard Canada (onboardcanada.ca), Canadian Board Diversity Council (boarddiversity.ca) and Competent Boards (competentboards.com). I chose the intensive two-day Not-For-Profit Governance Essentials Program, which was offered jointly by the Institute of Corporate Directors and the Rotman School of Management.
The primary reason I took the training was to help me understand the difference between being on the board of an organization and being in a management role inside that organization. While I have been on several committees over the years, my role as a board member began in 2018, and after attending my first few meetings, I realized I had a lot to learn to become an effective member. What I noticed specifically was that, as a lawyer, I run the risk of appearing to be focused on the weeds, as opposed to seeing the bigger picture.
A secondary reason is the ever-increasing focus on and impact of excellent governance in companies around the world. Over the course of the last few years, my interest in corporate governance has grown after watching company after company face intense public scrutiny for ethical allegations of all kinds, and hearing from global governance experts, such as David R. Beatty, Carol Hansell and Richard LeBlanc.
The main advantage of the training was that it helped me understand how to better focus on what matters. Here are some examples to illustrate what I mean:
- Succession planning: If succession planning of the senior management team is a focus for the board, its role is only to ensure the CEO or executive director has a plan in place for key positions. The board itself is generally only involved in the actual succession planning of the CEO or executive director position.
- Diversity: While the board should be instrumental in ensuring diversity is factored into the search for new board candidates as well as CEO appointments, it does not have a direct role in how diversity plays out in day-to-day operations. This is why the concept of “tone from the top” is important, as the make-up of the board serves to guide the organization on what it could or should look like.
- Social media: While the board does not direct social media policy, it can add value by asking to see the organization’s social media policy and plan, and requesting a presentation from its social media staff. This interest in a new area of risk demonstrates to management the importance of the topic and the need for thoughtful planning.
- Regulatory and other types of risk: While leaving the day-to-day management to staff, the board should ask for a list and discussion of the key risks affecting the organization and the status of mitigation plans in place to address same.
- Strategy: In an ideal world, the board should spend the bulk of its time discussing, planning and reviewing strategy with the CEO or executive director to ensure the future of the organization.
Overall, before you become a board member, or early on in your role, understand the risks you are taking on: Is the organization regulated by a provincial corporations act of some type? Or does a federal act apply? Do you know the personal liability risk you face? Do you know what the D&O policy covers (and does not cover)? Is the D&O policy sufficient to cover several months of salary of the organization’s employees in case of financial hardship? Can and should you buy excess D&O coverage? What is the board’s approach to diversity when it is time to recruit new members? How would others describe the culture of the board?
Return on investment
In the workplace, your board involvement helps you understand your employer and clients better. For every presentation you are asked to make for your board, you will be able to focus on what the members need to know and the types of questions they may ask. For example, if the organization has a new contract management software database, you will understand that your board will care about how acquiring this new software fits into overall risk reduction, the impact of the cost and what the company or organization will be able to do better (or worse) as a result. It also helps you determine what information your board members need, when they need it, and most importantly, why.
Outside of the workplace, your involvement on a not-for-profit board gives you experiential leadership and diversity training that will help in your career advancement. It also provides a great sense of meaningful community involvement, as you share valuable expertise, legal and otherwise. In addition, the other members represent a cross-section of different professions and industries to grow your professional network. Finally, it gives you a governance foundation you can build upon for later in your career (including into retirement) when you may wish to join larger not-for-profit boards or for-profit boards.
For these reasons and many more, I encourage you to get involved.