Are you coming on board?3 min read . Updated: 03 Jan 2010, 09:01 PM IST
Are you coming on board?
Are you coming on board?
After some discussion on the merits of sitting at the counter to witness the expert juggling of the teppan chef, we opt for my favourite window table at Mumbai’s India Jones, which has the added advantage of being able to keep an eye on the lunchtime deal-makers at the busy restaurant. Crispy corn kernels ordered, my dining companion, an experienced chief executive officer, shares that he has recently been toying with becoming an independent director.
To start with, time and commitment. Would he be able to manage his challenging job and be able to do justice to analysing board papers, attending meetings, running committees, mentoring executive board members on an ongoing basis? Assuming no conflict of interest, would his current employers be supportive?
Over the main course of steamed rice, accompanied by the signature coconut hormukh phak, we agree that in order to successfully contribute, the individual needs to have general management experience and the ability to evaluate and review a range of governance, operational, financial and strategic issues. Much of the role involves being to guide and enable, and this would mean the ability to challenge and question, as well as support and protect and remain objective. The willingness to use one’s network of contacts and relationships, and act as an ambassador for the firm is important, as is the ability and willingness to mentor. However, I add, shareholders will often seek people with specific functional, industry or process expertise to round off the skill sets at the table.
Different kinds of companies and environments will often slant expectations from independent board directors very differently. For example, a public company with diverse shareholders and an experienced management team may need a far greater focus on protecting shareholder value and governance. A private equity, or PE-funded entrepreneurial company may seek more strategic, operational and mentoring inputs. A not-for-profit organization will perhaps look to leverage an individual’s network to enhance visibility and awareness. A new-entrant, unlisted multinational may want to focus on advice on troubleshooting and how to get things done locally. PE funds may well want to have access to advisers and operating partners with functional or industry domain expertise on tap. The incumbent would be well advised to look within himself and assess his ability to best add value.
Given the increased reputational and financial risk for board members, we review some of the must-ask questions. Apart from the obvious research on governance and credibility of the operating team and shareholders, he would need clarity of the expectations from the shareholders. An indicator of this would be composition, diversity and the balance of skills of the existing board members. Was the process of seeking new directors mainly reaching out to friends and family through word of mouth, or did they employ a formal search process? Which committees would he be expected to sit on? Was there a clear compensation policy for independent directors? Were members compensated separately for chairing or sitting on committees?
Apart from word-of-mouth generation of opportunities, we agree that some judicious reach-out strategies would be a useful to get a sense of the market. Apart from reputed executive search firms, I suggest that he network with other professionals who were on boards, including lawyers and accountants, and to reach out to industry and professional associations.
Over jasmine tea, as I pitch a couple of boardroom opportunities with an Indian business house at him, he rather cheekily says he is “on board"—if the board meetings are held in the suitably exotic Asian locations as described on the menu disguised as a traveller’s map and diary.
Sonal Agrawal is chief executive, Accord Group, an executive search firm.
Write to Sonal at firstname.lastname@example.org