Corporate Boards Have Recruited Diverse Candidates in Greater Numbers Than Ever Before; Fully Engaging Them is the Next Priority
By Keith Meyer, Global Practice Leader, CEO & Board Practice, Allegis Partners
Over the past 18 months, particularly amid the social and racial justice movements, one important impact in the corporate world is that companies have brought on more non-traditional, diverse candidates to their board of directors than ever before. Boards have long prioritized individuals who had prior corporate board experience – which unfortunately eliminated a large swath of senior executives, particularly diverse candidates, and resulted in a disproportionate representation of white males on boards.
Now as an influx of diverse directors enter the boardroom, they bring a number of benefits, chiefly the value of new perspectives and viewpoints, as well as the broader organizational experience and expertise of these new directors, who increasingly hail from leadership roles in marketing, human resources and legal functions. As these Directors settle into their new roles, how boards fully engage them has emerged as the next challenge for boards to address in the coming months. That’s partially because a number of the new Directors do not have prior corporate governance experience, which is challenging under any circumstance but especially when boards are operating remotely, which makes it more difficult to develop personal connections and build meaningful mentor relationships. Therefore, in order to benefit from the full potential of the new Director talent, boards need to embrace a different approach to onboarding and mentoring.
While the current cohort of diverse Directors brings new areas of expertise and experience to the board, many do not have previous board-level decision making exposure. Additionally, even before COVID-19 forced boards to go virtual, many lacked in-depth onboarding programs and even those were cut down during the pandemic. With many new board members without prior governance experience now entering the boardroom, there is a growing need to reimagine the onboarding and assimilation process.
As we also move forward into what’s likely to be a lengthier hybrid work environment, the “reimagined” onboarding process should include an opportunity for the new board member to spend one-on-one time with each existing Director, the CEO and key management team members on video, in addition to the normal review of operating plans, budgets, financial filings, audit reports, prior board meeting materials and minutes, along with current business overview sessions. We are also seeing some CEOs and/or board Chairs schedule additional monthly video sessions with the new Director during their first year of board service. It is not unusual for the new Director to spend 50+ hours on their onboarding and assimilation program.
Equally important is redesigning the new board member’s mentoring process. Traditionally, mentoring occurred on an ad hoc basis over impromptu coffees, during car rides to/from the airport or at lunch before the Committee meetings. During those discussions, everything from emerging board issues to the culture of the board and the nuances of the Director role would be prime mentoring topics. Now, these interactions must be planned and executed in a different way, and as a result, more tenured board members must rethink how they can support the new Director and help accelerate their development without the benefit of in person interactions.
In all likelihood, a highly tailored approach for each individual candidate based on their unique set of experiences and areas of expertise will be a critical success factor, and while this may require more investment in terms of time and resources, it will pay immediate dividends as the new Director quickly blends into the board discussions and begins adding value while participating remotely.
Onboarding and assimilating diverse board members virtually represents a new frontier for many boards. It’s imperative to think strategically during the onboarding process about how to best unlock the new Director’s experience and expertise to ensure they have an opportunity to make a meaningful contribution and have a high degree of satisfaction during their first year on the board.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.