Effectively onboarding new directors
As organisations navigate their way through the pandemic it’s more important than ever that new directors are able to hit the ground running, and make a valuable contribution to board deliberations as soon as possible.
The problem is too many boards assume the onboarding process simply involves depositing a wealth of reading material on the new director, including documents such as codes of conduct, strategic plans, annual reports, etc, and expect them to quickly get on with the job in hand.
When the new starter has important responsibilities and liabilities from day one, this approach of throwing them in the deep end is not beneficial to them, the board or the organisation.
An effective onboarding can only be delivered via a well thought out and carefully structured induction process. It’s not by sending a forest’s worth of reading material to the new starter’s property, or emailing a link to the online board portal for them to peruse, and then expect them to add value in the boardroom from day one.
To enable new directors to quickly make a valuable contribution to the board as quickly as possible seven steps need to be taken:
- Expectations / role clarity: The onboarding journey needs to begin at the recruitment stage. Expectations of performance should be set out clearly in the advertisement for the role, interview, repeated in the letter of offer and mentioned in the board code of conduct. It’s those directors and boards that have clarity about how they will steward the creation of value, demonstrate it through their board and committee workplans, calendars, and be accountable for value creation on their board reviews who offer the greatest benefit. It’s important to remember that role clarity is at the heart of an effective board.
- Journey of learning: The chairman, supported by the company secretary, must take the lead in putting together a bespoke “journey of learning” induction plan before the new starter joins. It needs to be 18-24 months long to enable the new director to build familiarity with the organisation, supported with an in-depth induction pack. Bear in mind, the better the induction process the sooner the new starter will make an impact, and the more effective they will be. It’s vital in the current challenging environment. Boards need all the support they can get to ensure they move quickly in the right direction.
- Programme of visits to experience the work of the company: Travelling back and forth to board meetings is not something that will enable a new director to get under the skin of an organisation. Getting out and about within the organisation and speaking to staff is the best way to effectively gain an understanding of how it operates. To this end, the induction process must include a programme of visits and experiences – such as to regional offices – so the new starter can obtain a thorough understanding of the business. The knowledge gained from this will help ensure they add significant value to the board, not only in the short, but long term.
- Buddy system: When starting somewhere new there’s only so much it’s possible to learn from reading briefing notes and meeting minutes, for example. Having a buddy on the board, an experienced director assigned to the new starter, is the fastest way to gain an understanding of how things work, learn about the background of the board and why certain decisions have been made in the past. Having someone knowledgeable on hand to answer any questions enables the new director to be able to get up to speed much faster than they otherwise would.
- Bespoke governance training: Specific in-house governance training is an important part of the onboarding activity. It’s because governance processes are often slightly different between boards; in large part due to the ownership structure at the organisation. For example, family-owned Schroders is different to Barclays which is owned by shareholders. By far the quickest way for a new starter to learn the ropes on governance at an organisation is to have in-house governance training.
- Formal governance training: Based on their level of skills and experience, new directors should have formal governance training with a third party. This should be considered as part of the new starter’s professional development. It could involve training on financial competence, risk, rights, liabilities, corporate governance, and how to be effective in board meetings, for example. Undertaking this training is crucial for those directors who have never been on a board before.
- Review the induction programme: Each induction plan should be thoroughly evaluated so that it remains fresh and relevant to what is happening in the sector in which the organisation operates. It’s paramount that both the board, and the new director being inducted, are honest in highlighting where it has added value and where it hasn’t. This ensures that the induction process is improved over time. However, it’s also important to remember that it’s up to all parties – the chair, the wider board and the new director – to ensure the induction process runs effectively in the first place.
The time has come to bring the onboarding process for directors into the 21st century. It’s no longer an option for new directors to be left with a box of reading material, or a link to a board portal where information from the board can be accessed, and told to get on with their role without any additional support. For boards serious about the new director making a valuable contribution as swiftly as possible, it’s imperative that they have a well-planned and efficiently implemented 18-24-month “journey of learning” induction programme. Inductions should be front of mind even before an appointment is made, with expectations and role clarity communicated as early as the recruitment process.
With many boards still operating in emergency mode it’s vital that they follow the seven steps to director onboarding outlined in this blog. Only then will new directors be able to add value to the board much sooner than they would have done in the past.
For more advice on how to effectively onboard new directors, or how you can make sure your board is adding value, please get in touch with one of our experienced consultants.