I spend much of my time talking to clients about their board members, who they are, what they do and how they do it. Frequently it becomes clear that they just don’t have the right people on the board. They are good folk, with bags of experience and really useful skills and knowledge but just not the right ones. In this blog I will share with you the five common traps that organisations fall in to when appointing board members.
This is probably one of the most common pitfalls. Indeed, our government have recently discussed a proposal to require companies to have an employee representative on the board. It’s not unusual for housing boards to have tenant representatives, charity boards to have service users, school governing bodies to have parents etc. Similarly, organisations that operate in geographical sub units might have a representative from each patch on the board and one that has a number of technical divisions may have representatives from different professions. There is much evidence that boards are more effective when diverse. It can work well to make sure that you have individuals from a range of perspectives making a contribution to your board debates. However, when individuals are unable to separate their role of a being a representative from representing the interests of their group there is a risk that board discussions become a battle ground for supremacy, conflicts of interest go unaddressed or that important decisions are blocked. In this circumstance we advise organisations to be very clear about the role of the board member, and also be clear about what is not the role. We also advise organisations to consider alternative ways of gaining the input from their stakeholders such as stakeholder panels and working groups.
This is a common issue in charities and small organisations. The board looks for a new member that can cover a senior skill gap in the organisation, essentially creating access to free access to consultancy support. Whilst this may be an attractive way to save money, if your board member is getting involved in the management of the organisation like this, they lose their independence and are less able to offer an impartial view. We advise organisations to resist the temptation to use their board members in this way.
The friend or philanthropist
Another pitfall often seen in charities is to ‘reward’ donors and other benefactors with the honour of being a board member as a way of encouraging them to continue to give. Whist giving-history is definitely a short-cut to the identification of supporters for your organisation, and being a supportive is a pre-requisite for a board member, it is not an indicator of the skills and competencies required to fulfil the role of a trustee or NED. There is no reason to exclude a donor from your board but selecting a member on the basis of their giving-history is unlikely to serve you well.
The well connected
You may think that having a celebrity on your board will bring you much needed publicity, and it might. Similarly, a person with a particular network from their work-life or other interests could be attractive to you but remember that there are serious duties associated with board membership. It’s unlikely that someone you’ve chosen on account of who they know will be best equipped with the skills and competencies to serve on your board.
The time served
What is thought to be best practice varies from sector to sector but perceived wisdom suggests that there is a limit to how long someone will be able to do their best work as a board member. It may be hard to say goodbye to someone who has been on your board for 15-20 years and you may be afraid to lose their long memory of what has happened in the past but by this stage they really can no longer be considered independent and its likely that they have given their best already. Rather than automatically renewing their appointment, a carefully designed succession plan should make sure that you continue to benefit from the individuals vast store of knowledge whist allowing you to bring in fresh talent with renewed independence.
If you need help selecting your next board member or would like to know more about the role of a trustee or NED please get in touch.