Imagine - HR; are handling the 'bad banter' - Stella Chandler.pdf
Build a board for competitive advantage
1. A Board Built for Competitive Advantage
While turbulence is not new, its nature and degree present an ever-increasing need for executive-
level strategic acumen to capitalize on opportunities and mitigate risks in the ever-more-
sophisticated business environment. Strategic talent search for board members matches the
company’s future challenges with a candidate’s skills, experience and expertise. Recruited in this
manner, directors can clearly move the company to the next level. Cultivation of this focus
occurs at the intersection of business and talent at all levels of the company and is no different
for the boardroom. Alignment of strategy, talent and the director role is critical to the oversight of
strategy in a high-performing board.
Below are the top five tips to build a board with a focus on competitive advantage:
1. Build a future-focused board. The framework to build a board that will assist in the creation
of competitive advantage is all about integrated thinking, foresight and decision-making
rationale. A forward-thinking framework looks at the next five to ten years and identifies skills,
experiences and overall professional backgrounds of the director candidates that will be essential
to enhance the company’s competitive advantage.
2. Recruit directors for strategic challenges. To create a board that can manage the forces of
disorder and disruption means making significant transitions towards more future-focused
leadership behaviors and practices. Rethinking both how new directors are recruited and
successfully retained, can provide a progressive focus. Candidates whose backgrounds speak to
strategic challenges will ultimately bring a honed perspective for competitive edge. Here are a
few areas to consider when thinking about your next board candidate:
Growth: Does the candidate have a track record in growth situations?
Innovation: Does the candidate have experience with innovative cultures?
Ambidexterity: Does the candidate have foresight into new markets while appreciating
legacy positions?
3. Mine the collective intelligence of your board. In today’s world, executives are establishing
processes that have an emphasis on collective wisdom for competitive advantage. This concept
can be created and executed for the boardroom with the following:
Define the board structure, size and provide written specification for each director
position, board and committee charters and dedicated dates a full year in advance for
quarterly board meetings.
Prepare for board meetings. Set board meeting management (pre meeting, meeting, post
meeting) goals. Strategic facilitation in a board meeting should be aimed at the best
leverage of the board’s overall wisdom and allow for a balance of time for both
presentation and discussion.
2. Conduct a board evaluation that produces high-level thinking in a structured, organized
manner. This big picture thinking combined with an action plan moves the needle on
board performance and lays a foundation for continues improvement.
4. Create CEO and board alignment. Board alignment with the CEO is a critical component of
a high-performing board. Here are a few highlights to plan for CEO and board relations:
The most important job of the CEO is to gain the trust of the board – spending time with
each director inside and outside the boardroom to get a complete understanding of their
thoughts on the company strategy or issues of concern.
As the CEO, be mindful that all the board is on the same page and work towards a
collegial environment. Ask for constructive challenge on key strategic assumptions and
other items of importance to the company.
Create clear and consistent communication with the board that ensures no surprises in the
boardroom.
5. Provide real compensation. Public, and private company director compensation varies
widely depending on the size of the company and the demand for the executive’s expertise.
Compensation can be cash, equity, or a combination of both. The cash fee can be a monthly or
annual retainer, or variable, perhaps per meeting. While smaller U.S. public company
compensation averages around $100,000, private company can be as high as $50,000 a year.
Reimbursement for any expenses associated with the director role and directors & officers
liability (D&O) insurance are also common practice.
Ultimately, to build a high-performing board depends on the vision of all parties involved. A
progressive board composition is evidence of where the owners/ managers/sitting directors are
taking the company. The tradeoff to gain the “best” directors is time and money.
Consultant to Boards, Author of Board Guru™ eBook Series and Previous Sitting Director
– Triple Crown Value Proposition
Tracy E. Houston, M.A. is the President of Board Resources Services, LLC.
She is a refined specialist in board consulting and executive coaching with a
heartfelt passion for rethinking performance, teams, and the boardroom. With a
focus on leadership, strategy, and risk management, she consults primarily with
directors, presidents, and senior officers to provide input on high level,
sensitive, and complex issues. Sometimes called the Chief Potential Officer,
Tracy has a background that includes sitting on a number of boards, board
consulting, and coaching for potential. She develops unique insights into the
vital role of human interaction and the inevitable fusion between barriers to
growth and success. For more information, email: hello@eboardmember.com