The value of executive onboarding is clear. At a senior level it reduces the risk of organ rejection and sets the new hire up to succeed.
In our work with Chairmen building Boards fit for the future, Fidelio is now seeing a recognition of the importance of onboarding for new Board Members going above and beyond the traditional induction programme.
There are two primary, interconnected reasons for the focus on Board-level onboarding:
1. The spotlight on increasing diversity including at the Boardroom table – if Board Members with different backgrounds and experiences are to thrive and contribute, the induction programme must be thoughtful, practical and provide a continuous learning loop for the Board.
2. An increase in the complexity of challenges in today’s Boardroom – the speed and scale of change facing Boards means that (a) different profiles are required in the Boardroom and (b) new Board Members must be able to contribute within a short time period.
In the first of a series on Board Learning, Fidelio reviews what works in terms of Board induction and how Chairmen and Company Secretaries can ensure that new Board Members, including those with different background and skills, are effectively onboarded. This applies to Executive as well as Non-Executive Directors.
Time is a luxury most Boards don’t have and a focused and bespoke onboarding programme is an important tool which enables Boards to significantly up their game and get a head start.
SETTING UP BOARD SEARCH TO SUCCEED
The first step of the onboarding programme does not begin when the new Board Member joins the company, but at the very outset of the Board Search process. This is due to a number of factors including a robust process which supports onboarding and kicks in at the very outset of the Search:
1. Defining the role – It is critical for businesses to define where the role fits into the business strategy and Board profile. The benefits of this are threefold: (1) Candidates gain clarity on what the role entails; (2) the Company and the new Board Member have a transparent framework for reviewing success; and (3) by focussing on the role rather than the individual, companies achieve diverse outcomes.
2. Aligning the Nomination Committee – Companies that pride clear, disciplined and timely decision-making, including a lean and aligned Nomination Committee will be the winners in hiring, and retaining, talent. Search firms must contribute to this process if they are to add value.
3. Creating a compelling brief – Boards are competing for talent and need a proposition which stands out to attract the highest calibre candidates. There is significant value upon a strongly crafted, forward-looking Candidate Brief, communicating clearly the expectations for the Board Member, how these link to the corporate objectives, as well the culture and values of the business and the Board.
4. The feedback loop – It is imperative that feedback is collected and relayed from Candidates throughout, in order align expectations and avoid miscommunication.
The pace of change and disruption challenges management, requires fresh perspective and demands the successful onboarding of new hires. Upheaval and change also challenges the Board. This has led to a sharp scrutiny of the Board, its behaviour and its composition.
Induction is increasingly recognised as a critical step toward greater Board effectiveness. This is underpinned by:
1. The induction pack – including a Board overview of composition and processes as well as the governance and regulatory framework; best practice packs are personalised for each Director’s role and include a cultural and data organogram.
2. Building the network – this will include Board Members, the Company Secretariat and key members of the Executive but increasingly also includes functional Heads, including IR, HR and Corporate Affairs; as well as broader access to employees. A well-structured stakeholder map and overview of Board-level engagement with these key stakeholders is critical.
3. The feedback loop – smart Boards ensure that there is opportunity for induction programmes to feed into continuous learning for the Board as a whole based on the perspective of the new Board Member.
“In a context of increased Board accountability and mounting complexity, Boards run the risk of presiding very effectively over yesterday’s business while failing to meet the challenges of tomorrow.
It is the role of the Board and Executive leadership team to ensure a healthy future for the company.”
Gillian Karran-Cumberlege, Co-Founder, Fidelio
BOARD OVERSIGHT OF EXECUTIVE ONBOARDING
Boards also need to be mindful of effective onboarding at the Executive level. The proposed revisions to the UK Corporate Governance Code, published by the Financial Reporting Council in December 2017, have emphasised the importance of Board accountability for Executive succession planning.
Board oversight of the Executive talent pipeline and effective onboarding is a critical element in ensuring the organisation is fit for the future.
“ [The] Nomination Committee should lead the process for appointments, ensure plans are in place for orderly succession to both the Board and senior management positions, and oversee the development of a diverse pipeline for succession.”
Proposed Revisions to the UK Corporate Governance Code, December 2017
Best-in-class onboarding consists of more than practical administrative processes, tailored induction meetings with key internal and external stakeholders and site visits which are the normal practice. In order to rapidly build the Executive’s familiarity with the new organisation, a deeper understanding of the inner workings of the business is required. Increasingly, onboarding will include coaching to support the executive’s transition as they learn how to operate successfully in their new environment.
Effective Board responsibility and oversight of Executive onboarding is clearly a key differentiator in getting a head start.
Onboarding is a critical tool available to Chairmen as they bring new Board Members in the organisation. In the context of diverse Boards, onboarding is all the more important. Fresh perspective adds tremendous value at the top table but can also cause “organ rejection”. Onboarding is the practical response to this risk:
1. Setting up Board Search to Succeed – It starts at the beginning of the Search process with clarity of the role description and objectives of the role.
2. Board Induction – at Board level, the Company Secretariat will be alert to building that first initial understanding, contact and network so that the new Director has every opportunity to succeed and contribute to Board effectiveness.
3. Board Oversight of Executive Onboarding – An effective Nominations Committee will be playing close attention to the Executive pipeline which includes succession planning and a robust and supportive onboarding process.
Effective onboarding at Board level is clear indicator of the Boards ability to learn and adapt. For Boards facing dramatic change the induction programme is a distinct opportunity to raise their game.
To learn more about best practice and how leading boards are developing the induction programme, contact us.