What New Directors Need to Learn
You’ve gotten the offer to join a board, you’ve done your homework and said yes. Now here’s what you need to do before your first meeting
by Beverly Behan
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Once you’ve accepted a board invitation, the company will organize your orientation program. The savviest directors structure sure they’re learning which they really need to know under the jurisdiction they enter the boardroom and frequently make limited requests for information, meetings, and visits to supplement whatever the company has planned. Here are some areas you’ll want to think about.
Terminology
Industry terminology, acronyms, and buzzwords are frequently used in board presentations. These subsist possible to leave new directors mystified, yet disinclined to ask what they parsimonious when everyone otherwise seems to understand them. To avoid this problem, ask for a short glossary of terms relevant to the company and its industry.
Strategy, Key Issues, and Top People
These are the three most important areas for somewhat new director to learn almost right out of the gate. Often the best approach is to wear away two days at corporate headquarters congregation one-on-one by senior executives, starting through the chief executive and financial officers and influencing through the top ranks. This allows company executives to get to know you before they set going working with you in the boardroom and gives you a chance to learn about the company in a forum where you can more comfortably ask so-called mute questions.
While you will have met the CEO (and possibly the CFO) during the director recruitment process, this round of meetings has a true different tone. These are aimed at providing you with a deeper understanding of explanation issues appropriate to someone who is about to pull up a seat at the board table. Your earliest meeting should be with the CEO to give you an overview of the company and the key issues he/she is facing and typically includes a "deep dive" on corporate strategy. It can be helpful to ask whether there is a recent strategy document that you can each military in advance of this conference or have the CEO enchant you through when you induce side by side. Meeting with the CFO provides an opportunity to learn how the numbers are put together and understand key metrics used to gauge performance. A useful exercise for this meeting is having the CFO walk you through the last quarterly financial statement. If you receive been asked to serve on the Audit Committee, it’s also a good idea to bestow some time with the external auditors.
Right at the outset, schedule a follow-up light of day of meetings with top management six or eight months down the road. By then, you’ll be far enough along on the learning curve to crave even added focused questions.
Site Visits
Many companies organize site visits for new directors. If none are planned similar to part of your orientation, sue for at least one. For example, if the company has couple major lines of business, you may want to visit one operation in each sector. If company operations are readily accessible, as in the retail industry, you can design your own site visits simply by visiting stores. Drop by stores of major competitors as sound.
One cautionary vocable on site visits: Staff will at times advance budget issues or complain about company policies during your visit. Three recent directors without ceasing a mine pay a visit to found themselves in this situation when the undermine manager complained about a $3 million expansion inmost nature slashed from his budget. The new directors told him this "seemed like a mistake." As their helicopter lifted off, the mine manager was on the phone with the CEO effective him that he had support for his budget at the board level. Needless to say, the new board members—who had little knowledge about the large factors that went into this budget decision—met with an icy reception while they returned to corporate headquarters. The best response is nearly always to suggest that you’ll bring such comments back to the CEO—and to do so.
Learning About the Board
Committee charters, governance guidelines, and bylaws tend to be boilerplate but are still worth reviewing. More interesting is to water-newt for the last board assessment, which should provide insights upon the body how the board perceives its strengths and weaknesses. Another illuminating document is the CEO’s last performance assessment.
Your recruitment interviews will have given you an opportunity to meet with more board members, otherwise than that perhaps not completely. Try to meet as many of your fellow directors as you can before or shortly after your first board meeting. Begin through asking the chairs of each board committee if you can pass an hour with them—in person or without interruption the phone—to get up to speed without ceasing committee issues. For others who don’t chair committees, make a point of calling them to say "hello" and or get together in person, if geographically feasible. Taking this initiative demonstrates your desire to act with them as colleagues and to get to be sure them as people, which can be critical whenever a new head joins some existing team.
This type of learning takes time and effort, which be able to be demanding without ceasing a meddling monitor’s schedule. But in today’s governance environment the more you learn and the faster you hear is critical. Not only will you be able to contribute more quickly as a board member, you’ll feel more confident in knowing what’s really going on at the company you’ve just agreed to help govern.
From: What New Directors Need to Learn
