Until few years ago many corporate, private and non-profit boards lacked a formal board education program. To this day, many non-profit boards underestimate the need for board members to understand how their type of board should be optimally governed and what their individual roles entail vis-à-vis ensuring good governance. Many private boards, particularly the boards of start-ups, are not requiring or facilitating training or mentoring for executives or entrepreneurs, who would do best to learn about proper governance in the early stages of their roles. While everybody is busy focusing on growing fast, the basics need to be addressed and can’t be overlooked. This is exacerbated when a board doesn’t have a strategic approach to board composition, since part of achieving true diversity is governance knowledge by all board members. As risks are increasing for boards and their organizations, particularly public, board education is critical.
When we think of board governance, the priority is effective governance– regardless of the type of board— and ensuring that each member is as effective as possible. As I shared in a number of blogs in the recent months (including “Serving on a board? Here’s how to be great!” as well as in my eBooks), each individual brings unique knowledge, experience and skills to his/her board service, and understanding the organization they serve and its strategy is critical. A director could have all kinds of certification and education, but the reality is that the right talent needs to be present at the board table and able to grasp what the organization is doing and will need to do, first and foremost. Education and certifications are valuable, but not necessarily as valuable as real business experience and know how. Regardless of background, contributing to the harmonious efficacy of the board as a whole, and coming in with an aptitude for strategy and a willingness to serve are key.
With governance being increasingly demanding, particularly for public/corporate boards, I believe it is extremely beneficial and important for anyone to get educated when they anticipate wanting to serve on a board– or when serving and not fully versed in governance. Education does not eliminate risks, doesn’t assure effectiveness, but it minimizes vulnerabilities. How you apply your education will hopefully contribute to greater effectiveness.
Today, many private boards and start-ups have members who have no governance education. This is an issue that can potentially become more serious as time passes. Should uneducated (or under-educated) members still be with the organization when it progresses towards an exit strategy (such as M&A or an IPO), they won’t know what they don’t know, leaving them unable to control what they could and should be able to control, and unlikely to delegate to (and manage) trusted advisors with the necessary know-how. Their learning curve can contribute to excessive retainers and assumptions that may add to the risk component.
Private and public boards are most definitely more vulnerable if their directors haven’t gone through a basic governance curriculum. While boards should have a group of experts advising and guiding them on matters where they don’t have deep knowledge, there is a minimum set of governance practices that every director should be aware of. Moreover, when decisions are handed over to Corporate Secretaries, Legal Counsel and auditors, there has to be a minimal level of understanding to avoid blindly delegating. Here are some basics I’d recommend for every board member or aspiring board member:
Get educated about board governance
Make it a priority to understand board responsibilities and liabilities, the corporate governance landscape, risk management and oversight and compliance basics. Learn, and commit to become a champion for effective governance and an advocate for instilling processes for succession planning and compensation. Be determined to be a positive influence for greater rigor where it needs to exist.
Get involved with peer-to-peer networking
Peer-to-peer networking is a great starting point for increasing your knowledge about governance challenges and issues. Active board members can be great sources for “current” and “red flag” topics. Good board members can share with you best practices and things to avoid based on their past experiences, and they can potentially become important resources to you.
In addition to networking personally with these individuals, look for networking events that are planned and led by highly respected institutions, such as academic or governance organizations. Sign up for their mailing lists, and you will be exposed to relevant topics and able to follow what is of interest to you. Getting connected in this way will allow you to focus on an aspect of governance where you could be a stronger respected voice within the board you currently serve or might serve one day.
As with any subject, the people you’ll meet through networking will have their own lens, and by interacting with them, you’ll develop and/or strengthen yours—making your independent voice and viewpoint even more valuable to the boards you serve.
Take advantage of online webinars and resources
As stated in a number of my blogs, if you have the intention of being a great director and are purposefully and intentionally aligned with a board that you serve, you should take it upon yourself to allocate time to be informed and follow what is of interest to you. Join relevant groups on LinkedIn, follow insightful bloggers, register for webinars and online events, and seek the online communities members of your board (or target board) belong to online and get involved.
Pursue board governance education and training
Consider enrolling in governance education and training courses through recognized and reputable institutions. There are many associations that have well-structured programs. There is no substitute for a highly regarded and proven program. Being able to state in your resume that you participated in a high-caliber, structured director education program, cognizant that it is not the number one criteria to be on a board, is a worthwhile asset.
Certification, in my opinion, is not a must, but it is nice to have. What is a “must” is possessing the right knowledge, skills and experience, being a clear thinker, knowing how to assess a situation and being proactive and decisive. While these traits might be included in an academic curriculum, they can also be learned through the experience of entrepreneurship and/or leadership. If you choose to pursue certification, research and scrutinize the programs being offered, the depth and breadth of information they include and the rigor of the process they use to certify individuals.
Take the initiative to learn, to be knowledgeable and to know how to best apply your knowledge to contribute to the highest level of effectiveness for a board. Focus on being an effective leader in your day-to-day, as that experience is invaluable. Embracing being a transparent communicator, focusing on relevance and consistently asking the right questions of your team will enhance your ability to be an effective leader in the boardroom.