Emotional Intelligence in the Boardroom

I am celebrating my 20th year of serving on corporate boards and have learned it is not so much what you know, but rather how you say it. I have had to train my sense of emotional intelligence (EI) at the boardroom table – including paying attention to everything from verbal communication, to body language, tone of voice, and social graces.

I have been around some of the best and brightest board members that have inspired me to reach higher levels in the boardroom. I have also been around other board members that lacked in their EI, with their social graces lacking and boardroom presence very uninspiring.

According to Daniel Goleman, an American psychologist who popularized the concept of EI, its definition is: “the ability to understand and manage your own emotions, and those of the people around you. People with a high degree of emotional intelligence know what they’re feeling, what their emotions mean, and how these emotions can affect other people.” Goleman also organized Emotional Intelligence into five key elements:

1. Self-awareness
2. Self-regulation
3. Motivation
4. Empathy
5. Social skills

Using this understanding of emotional intelligence, I am going to apply these five elements to explain how leading and serving corporate directors can be more emotionally intelligent in the boardroom.

1. Self-Awareness

Being self-aware is being conscious of your thoughts, behaviours and tendencies. I often come across board members that lack self-awareness at the boardroom table, too busy talking and not doing enough listening. In a recent article published by executive search consultants Heidrick & Struggles, authors Bonnie W. Gwin and Victoria Reese urge board members to listen first. “You should be the last to speak,” says a leading female board chair […] listen empathetically, solicit other points of view, and be the most prepared, even though you don’t talk the most”.

By putting self-awareness into action, there will be sometimes where you already know the answer to a discussion, however exercising this skill means being conscious of your biases, stepping back and considering the subject matter with neutrality nonetheless.

2. Self-Regulation

Self-regulation is concerned with how you manage yourself, your emotions, your inner resources, and your abilities. It also includes your ability to manage your impulses. Applying this facet of EI to your boardroom behaviour means controlling your emotions and how you decide to express them. If you find that you are overwhelmed by your emotions on a topic or matter that you are passionate about, instead of impulsively speaking out on your feelings, try remaining silent for 5 seconds. 

Mel Robbins is the author of the book The 5 Second Rule, where she explains that “if you have an impulse to act on a goal, you must physically move within 5 seconds or your brain will kill it.” While the 5-second rule is aimed at encouraging people to break away from habits that inhabit their action on a goal, it can be reversed to curb disruptive impulses. By waiting 5 seconds before speaking on high emotion, it gives you a moment to cool down and for the impulse to subside. 

My best piece of advice in exercising self-regulation is that rather than acting on impulse, it’s far more effective to observe others’ behaviours and find a different time/place to have discussions that concern a difference of opinion.

3. Motivation

Self-motivation encompasses our personal drive to grow and achieve. It concerns our commitment to our goals, our initiative, our readiness to act on opportunities, our optimism, and our resilience. Motivation in the boardroom can be described as your commitment to lean in, which you can learn more about by reading my blog on Finding Your Voice at the Boardroom Table. 

So, how does one lean in at the boardroom table?

Start by taking a leadership role on a particular topic, issue, or governance process on which you have specialized expertise. For instance, I have been asked to “lean in” on specific due diligence processes as part of an M&A transaction. Also, you might “lean in” as the Chair of the Corporate Governance Nominating & Compensation Committee, where you might have the opportunity to lead the process in engaging outside advisors to provide an Executive & Directors Compensation review. Yet another great example is leading a board renewal process and ensuring your board is advancing gender diversity in the boardroom. Most importantly, remember the roles which you “lean in” on may relate to your specific board committee, but can also take place outside of the boardroom, so make sure to remain open to and seize any form these opportunities may present themselves in.

4. Empathy

When you listen with empathy to another person, you give that person psychological air.”  — Stephen R. Covey

In an article on emotional intelligence authored by Korn Ferry, empathy was described as “the ability to sense others’ feelings and how they see things. You take an active interest in their concerns. You pick up cues to what’s being felt and thought. With empathy, you sense unspoken emotions. You listen attentively to understand the other person’s point of view, the terms in which they think about what’s going on.”

This emotional intelligence component is a critical trait in being a board member. I find the best way to demonstrate empathy at the boardroom table is to attend meetings in person since it is very challenging to evoke empathy on a conference call. In-person, you can observe the other person’s body language, as well as other critical non-verbal cues that enable you to get the full picture of what the speaker is trying to convey. Understanding the other person’s full view is key to being able to share and take an interest in their perspective, follow the source of their emotional position on a topic, and ultimately make a more informed decision. 

5. Social Skills

When dealing with people, remember you are not dealing with creatures of logic, but with creatures of emotion.” — Dale Carnegie

Social skill, the ability to manage and influence others’ emotions effectively, is the final piece of the emotional intelligence puzzle, which brings together all of the other components. It is a composite of competence in communication, persuasion, building rapport, conflict management, change management, teamwork, and leadership. At the boardroom table, this means being able to establish positive relationships with other board members, gaining their trust, and knowing how to balance when to be assertive with when to be a team player. 

To put this into a relevant situational example, let’s say a board member falls asleep in a meeting. You have two choices, which are either to call them out publicly and risk embarrassing that director, or to approach them discreetly and ask them if they might like a coffee. The best choice is the latter, given that calling out a colleague creates the potential for tension in that relationship and is likely to offend them. It’s essential to keep in mind the golden rule, “do unto others as you would have them do unto yourself”, as it is perhaps one of the most effective social strategies.

My final word is that emotional intelligence in the boardroom is all about minding your Ps and Qs. However, while easily overlooked, this carries with it the payoff of a more cohesive board that effectively makes better business decisions.

Financial Intelligence in the Boardroom

Every board member has a role in financial oversight. Even if you don’t have financial expertise, you are still expected to maintain an adequate level of financial intelligence. This means that you need to have an understanding of the fundamental concepts, conventions and principles underlying financial statements.

Top 5 tips to help you boost your level of financial intelligence in the boardroom:

1. Develop a plan and begin the work. Start by reviewing the annual filings of TSX listed companies that you are interested in or work for.

2. Seek out a mentor or someone who has financial expertise. Ask someone you know that has financial expertise if you can spend time with them over the next 12 months, transferring knowledge and helping you understand core financial concepts.

3. Understand the basic financial concepts/principles and how to look at financial statements. CPA Canada has great document you can refer to: https://www.cpacanada.ca/en/business-and-accounting-resources/financial-and-non-financial-reporting/international-financial-reporting-standards-ifrs/publications/reading-financial-statements-what-do-i-need-to-know-faq

4. Do your financial due diligence before joining a corporate board. Review the annual audited financial statements, quarterly financials, Management, Discussion & Analysis (MD&A) and fore-casts/budgets to understand the company’s financial position. Ask yourself the following questions: Is the company solvent? Are they complying with their loan covenants? What is the company’s share-holdings structure, are their Related Party Transactions, what are the outstanding commitments? What is the status of their tax and other filing requirements? Did they receive a clean audit opinion? If not, why and is there a “going concern” note disclosure?

5. Make sure to understand reports on financial statements.

Financial statements are a formal record of the financial activities of a company over a period of time and/or the financial position of that company at a point in time. CPA Canada has issued this guide to help understand reports on financial statements and the different levels of reports (i.e., audit, review or compilation): http://ncca.co/news/understanding-reports-on-financial-statements/

Gaining financial intelligence in the boardroom takes time, focus and commitment. This investment is imperative for every board member to do so in order to make valuable contributions at the boardroom table that drive the success of a business.

Ethical Intelligence in the Boardroom

In the wake of countless business scandals and corporate collapses, there has been a call for a higher standard of business ethics. Ethics are at the heart and soul of every business decision; they form the basis of the underlying culture of every company. However, the culture and ethics of a company are set by the tone at the top: the boardroom.

How can boards build a sound and sustainable culture as well as good ethical practices that will improve transparency, decrease the risk of fraud, and reduce the likelihood of reputation damage? The key focus should be to institute practices that outline the expectation of appropriate conduct, and to put in place controls that ensure these standards are being met.

Five good governance practices to put in place to ensure good oversight:

1. Code of Conduct

A Code of Conduct drives the board and each director to focus on areas of ethical risk, provide guidance to directors to help them recognize and deal with ethical issues, provide mechanisms to report unethical conduct, and ultimately helps foster a culture of honesty and accountability. It is the responsibility of each director to comply with the letter and spirit of this Code. It should be reviewed and signed off on annually. The Code of Conduct should cover off areas such as:

• Director responsibilities

• Conflicts of interest

• Corporate opportunities

• Confidentiality

• Compliance with laws, rules and regulations, fair dealing

• Reporting of illegal or unethical behaviour

• Compliance procedures and waivers

Two samples of a model code of conduct for corporate directors can be found at the links below:

• https://www.eastman.com/Company/investors/Corporate_Governance/Documents/Code_Business_Conduct_for_BOD.pdf

• https://www.mpac.ca/sites/default/files/imce/pdf/CodeOfConduct.pdf

2. Whistleblower Policy & Program

Whistleblower policies are a mechanism whereby employees on the frontlines are able to report legal and ethical business concerns that management, as well as the board, may not have view of. Whistleblower policies should afford employees a sense of anonymity that encourage them to come forward with their observations, without the fear of retaliation. These policies when executed properly, protects the business through early detection of wrongdoing – however many of these programs falter, with the onus falling on the board. Whistleblower programs that fail to foster a sense of support for employees or breach their sense of confidentiality create a culture plagued by a sense of neglect, fear of retaliation, and resentment.

It is the responsibility of the board to ensure bad news has the opportunity to rise to the top through the implementation and exercise of Whistleblower policies that are anonymous, independent, rewarded and remedied. An effective board should insist on the facilitation of proper channels that goes directly to them.

3. Ongoing Board Renewal Process

Board renewal, the regular review of a board’s composition, is an ongoing process instituted to ensure the maintenance of good governance practices and to promote relevance in a changing business environment. The Corporate Governance & Nominating Committee (CGNC) of the board is responsible for regularly reviewing the composition of the board and identifying new board candidates. Newly appointed board members are valued for their ability to see things with a fresh set of eyes and a perspective that long-standing board members may not have to due to long director tenure. Setting term/age limits for directors is an important facet of the consistent re-evaluation of a board’s effectiveness is already being done in several countries. Having a diverse strategy and ongoing board renewal process creates diversity of thought which facilitates critical thinking and avoids group-think. You can read more on why a diverse board makes good business sense in my earlier blog post here.

4. Review your Diversity & Inclusion Policy and Practices

Most organizations have begun implementing diversity and inclusion policies and even include diversity related questions in job applications. However, it’s important that these initiatives reach beyond a pre-hire questionnaire or a legalistic human resource policy.

Boards should strive to ensure that they are adequately iterating their interest in maintaining an inclusive culture through succinct and related education about LGBT, ageism, ethical & and gender matters. There should be communication regarding appropriate workplace interactions, and implementation of training on unconscious bias. These efforts should be further elevated through diversity and inclusion benchmarking.

A great example of a well-drafted diversity and inclusion policy comes from Ontario Power Generation (OPG), whereby the policy statement reads:

“OPG embraces diversity in its broadest sense – a mix of talents, perspectives, backgrounds and experiences that increase our collective capability. OPG believes strongly in developing a culture of inclusion in which everyone is treated fairly and respectfully and each member is valued as an integral part of the team. OPG embraces, respects, accepts and values differences among all employees and directors.

Diversity is an integral part of our business practice and the constituency of the OPG Board of Directors. The Board considers diversity essential in attracting qualified directors and maintaining a highly effective Board. The Board, its Committees and their associated meetings are organized and presided to create an inclusive environment to engage all Board members.”

You can read the full policy here.

5. Internal Controls/Review of Culture & Integrity

On an annual basis, have internal audit test the controls for culture and integrity (including complaints, reaction time, investigation protocols, record keeping and non-retaliation) and report directly to the board on their findings.

Also important is to ensure that unbiased information is being filtered through to the board level. This includes implementing controls such as regularly removing management from boardrooms in order to create a safe space such that directors can share transparent views, as well as seeking out disaffirming feedback regarding company culture and executives. These steps should be complimented through the receipt of untampered employee feedback, collected through regular surveys of employee morale, exit interview results, and a comparison of staff turnover and litigation rates against industry peers.

Board Diversity – Are You an Agent of Change?

It still surprises me that there has been little change in Corporate Canada in terms of adding more women to TSX listed boards.

It has been four years since the Ontario Securities Commission (OSC) implemented disclosure rules mandating that TSX-listed companies “comply or explain” as relates to their board diversity figures. The implementation was intended to lead to positive changes in how corporate boards recruit new board members, however, according to the recent Osler, Hoskin & Harcourt report 2018 Diversity Disclosure Practices, only 16.4% of directors sitting on corporate boards in 2018 were women. This change represents a slight increase in the average proportion of women on the board compared to prior years when the average percentage of female directors was relatively stagnant (12% in 2015, 13% in 2016 and 14.5% in 2017).

So why is it that Canada’s boardrooms are not more diverse, when in fact, I often get asked to consider a board opportunity because the company is looking to add diversity to its board? I truly believe that creating a diverse board requires business leaders to step up to recognize the positive impacts of and the necessity of developing a culture of diversity in the boardroom, which many have been slow to do.

 Become an Agent of Change

As the Founder & CEO of Women Get On Board, and as a serving independent corporate director, I believe that the OSC’s “comply or explain” disclosure rules present an opportunity to build stronger boards through change. There is research to support that empowering more women to boards generates better financial performance, including a higher return on sales and better stock growth. Just as well, non-financial performance, like the contribution of diverse viewpoints, skills and experience, can improve overall decision making, enhance a company’s capacity to build a pipeline of potential future women executives and encourage innovation. You can read my blog post on why a diverse board makes good business sense here.

So, how can you be an Agent of Change in making board diversity a strategic opportunity for board-building? The first step is to ask yourself these ten questions to help advance your board diversity mandate:

 10 Board Diversity Mandate Questions

1. Do you perform an annual board assessment of your current board composition, and do you have a diversity of thought, skills, experience, gender, age, industry and geographic?
2. Have you defined what board diversity means to your company in terms of the commitment and needs?
3. Do you have set term limits and age limits for your current board?
4. Do you have a board diversity policy that sets out targets for women representation on your board?
5. Do you go outside your current network when looking for new board talent?
6. Do you have an internal diversity champion?
7. Do you perform an annual board performance evaluation for board renewal?
8. Do you keep an evergreen list of diverse board candidates for board renewal?
9. Do you have a board succession planning process?
10. Do you ensure there are diverse board candidates in the board search process? (Women Get On Board offers a board shortlist service to companies who are committed to advancing gender diversity in the boardroom. )

These ten questions were originally posted in my blog “Are You Advancing Your Board Diversity Mandate?” in May 2016.

There is clear evidence that diverse boards enhance all facets of a company’s performance, so as business leaders, it is our duty to all step up today and collectively be Agents of Change in advancing board diversity in Canada. Together, we can make a difference in promoting diversity as a strategic opportunity for board-building.

Exploring New Board Opportunities, Being Gracious in Saying “No”

So, you are excited you received an email or phone call asking if you would consider a board opportunity. The steps you take to determine whether you are interested or not should be particularly strategic when exploring new board opportunities.

The first step, do your due diligence in making sure you understand the company, culture, any conflicts that exist, and why you were considered for the board opportunity. Refer to my blog on building your board profile here: https://womengetonboard.ca/building-your-board-profile.

Make sure you know the companies or industries that you are interested in.

Review their values, mission and strategy. Do they align with your skills, experiences and values? Will you add value?

I always evaluate Board opportunities in three ways:
1. How can I add value?
2. Do I have a personal statement of the attributes I can bring to the board?
3. How can I use my network to make meaningful connections to grow the business?

The second step, if you are interested the opportunity, you should request more information early on, including:

· A detailed board position specification (profiles the skills/expertise the board is looking for and the board recruitment process)
· A copy of the corporate calendar (outlining board meetings and committee meetings)
· Information regarding what committee you would be considered for
· Financials and who the other board members are, if the company is private
· Information regarding why the company is recruiting new board members (renewal or additional members?)
· Potential connections to any of the board members through your network (learn more about network mapping your way onto a board in this blog post: https://womengetonboard.ca/network-mapping-your-way-onto-a-board)

Joining a board is about fit and style, and the board wants to make sure that your style will align with theirs. To help them decide, think about your network and how you might be connected to any one of the existing board members. This is what I call “network mapping.” Use your network to map out how you might be connected to members of the board — the more connections you have to the board, the more comfortable they will be with your likelihood of fitting in. Don’t be afraid to ask for introductions!

The third step, you have been asked to a board interview.
Congratulations! Now that you have landed the interview what do you need to do to prepare? A board interview is similar to a job interview in that you want to put your best foot forward. Where board interviews differ is that the preparation required stems from a governance point of view rather than from a management viewpoint. My blog on preparing for a board interview provides you with ten tips to consider when preparing for a board interview: https://womengetonboard.ca/preparing-for-a-board-interview.

Now, let’s say you have gone through the above steps to determine whether you are interested in a particular board opportunity and you decide that you are not – think about how you can be gracious in saying “no”.

1. Be specific as to why you said “no.”

You could say something like, “thank you for the opportunity to be considered for the board opportunity but:”

• I am already serving on the board of several other similar companies
• I am conflicted on the corporate calendar
• I am interested in diversifying my board portfolio (see my blog: https://womengetonboard.ca/are-you-diversifying-your-board-portfolio)
• I am not interested in this particular industry
• This opportunity does not align with my values
• I am not interested in the public sector/crown corporation boards
• I am over boarded – meaning you are serving on too many boards to have the time/capacity to commit to another board opportunity

2. Reposition what you are looking for instead

Take the opportunity to let your network know what you are looking for. Perhaps it is something like:

• I am interested in a company that is global and is TSX listed
• I am interested in a company that is focused on (this) particular industry
• I am interested in a company that aligns with (this) set of values

3. Offer to assist by referring 2-3 other potential board candidates

Turning down a board opportunity allows you to say something like “I appreciate the opportunity to be considered, but would be pleased to refer some other potential board candidates”. It is important to be building your own pipeline of other qualified board candidates to refer, since nothing is as important as paying it forward for others.

You should always be exploring new board opportunities, since your board portfolio should be very fluid, your board term may come up, or the company you are serving on a board for may go through an M&A transaction. It is also valuable to meet other serving corporate directors, through which you can build your own pipeline of qualified candidates that you can refer for board opportunities.

Finding Your Voice at the Boardroom Table

What does it mean to find your voice at the boardroom table when you are a new board member appointed to a board that has longstanding relationships? Or a new Chair of the Board is appointed and you have never worked together? Or when you are the “token” woman at the boardroom table?

How do you break in with credibility and build trust with your board colleagues? There are five tips I would like to share in helping you find your voice at the boardroom table:

1. Onboarding

An onboarding process is set up to ensure that new board members familiarize themselves with the company, the industry it competes within, and the governance practices it’s ruled by. Its purpose is also to familiarize new board members, like yourself, with people you will be working with, such as other board members and members of the senior management team. It’s not uncommon that new board members may take up to a year to feel that they have fully completed the onboarding process and can become truly effective in their role.

2. Prepare, Prepare, Prepare

As a new board member, in addition to your due diligence process (which includes asking for industry reports, reviewing board materials such as minutes of past board meetings or board documents, and taking the time to read up on any applicable legal or regulatory requirements), it’s critical to also get a sense of the expectations and norms before attending your first board meeting. Make sure to get a clear view of what the expectations of you are, what your board mandate is, and what committees will you be serving on. Then, follow up by gathering information about specific board protocols including how far in advance board documents are distributed, how the board conducts business, and start dialogues with other board members about the boardroom dynamic, looking out for cues about boardroom etiquette.

3. Build Out Your Relationships

Some boards have adopted a “buddy system” that takes effect throughout the onboarding period, pairing a tenured board member with a new board member as a way of showing new members “the ropes”. However, when the onboarding process is over, new members are often left to find their own way. As a result, you need to ensure you’re putting in place the systems to find your own mentors to have conversations with and learn from. A great way to find these potential mentors is through observing boardroom dynamic – board members that have a strong hand on the conversation, or those that most closely resemble your own style can be effective role models to learn from.

Yet, while finding a mentor is important, building out relationships of all types is a key pillar of success in the boardroom. There’s no arguing that it takes time to find your voice at the boardroom table, so take that time to start building relationships that will help you ease into the conversation. I suggest meeting with other board members outside of the boardroom and setting up one-to-one meetings with the CEO. It takes time to become an effective board member, but a focus on relationship building and trust building will result in establishing credibility with your fellow board colleagues. This in turn, will help in making valuable contributions in the boardroom, and increasing the level of support you feel around the table.

4. Lean In

The concept of leaning in means to be assertive, to move toward a leadership role rather than a follower’s role. Imagine a round table discussion, the most active participants are the ones physically leaning forward into the table and the discussion, while those who are willing to take a back-seat approach are usually in a more passive, distanced position. So, how does one lean in at the boardroom table?

Start by taking a leadership role on a particular topic, issue, or governance process on which you have specialized expertise. For instance, I have been asked to “lean in” on certain due diligence processes as part of an M&A transaction. Also, you might “lean in” as the Chair of the Nominating & Compensation Committee, where you might have the opportunity to lead the process in engaging outside advisors to provide an Executive & Directors Compensation review. Yet another great example is leading a board renewal process and ensuring your board is advancing gender diversity in the boardroom.

Most importantly, remember, the roles on which you “lean in” on may relate to your specific board committee, but can also take place outside of the boardroom, so make sure to seize these opportunities.

5. Stand Up for What You Believe In

My last piece of advice is to stand up for what you believe in, form a clear point of view, and most importantly, never feel pressured into making a board decision you do not agree with.

All else said, the board selected you based on your expertise/skills, strategic insight, and leadership track record, so if after hearing out the table on a discussion, something doesn’t feel right, stand behind your instincts. There is no lesser way of demonstrating your value than by following someone you disagree with because of a willingness to stay quiet. Even if this means that you have to fall down and pick yourself back up, put yourself out there, make yourself visible, and be fearless, because the only way to be heard is to speak up.

A Strategic Approach to Filling Board Positions Is Critical — Regardless of Your Gender

 

Written by:
Debbie Stojanovic, CEO, Nealon Consulting
& Deborah Rosati, Founder & CEO, Women Get On Board

Diversity, and gender diversity in particular, is a top agenda item in boardrooms today — as it should be. It’s a priority not only because there are now legislative and regulatory changes that require it, but also because it’s just good business practice.

Research shows that the right board composition can enhance decision-making processes and augment an organization’s performance and market reputation. ¹  Can an improperly composed board pose a reputational risk for your organization? You bet.

Today, we can’t open a newspaper, attend a meeting/event or have a general conversation without touching on some aspect of diversity. And that’s a good thing. From a board perspective, the conversation is shifting from why we need more women at the table to how we can accelerate progress. In light of this, it will be interesting to see what transpires over the next few months as many public company AGMs take place. The board and management can and should expect questions from shareholders and the public-at-large about their views on diversity and the company’s plan to ensure its people are reflective of the communities in which we live. ²

Case in point this year’s TD Bank AGM. Throughout the meeting, there were several queries about diversity. In fact, a number of shareholders wanted to know two things: (i) what TD has and is doing to increase the number of women on its board — currently at 38% and (ii) what the is bank doing about women in leadership, which is the root cause of this issue. ³  “It’s a major priority,” said Bharat Masrani — the bank’s CEO.

An example where the pace of change is very slow is Constellation Software. A year ago, a shareholder resolution calling for diversity on its all-male board garnered 42% of votes, this year’s vote moved to 49% support—but in the end—it still failed. Despite the outcome, this is another example of the shifting views in corporate Canada about the importance and value of diversity on boards of directors and in executive suites.

The corporate view of recruiting more women on boards is changing and it helps to have input and support from organizations, such as ISS and Glass Lewis. By releasing updates to their voting guidelines for Canada and the US, these organizations are helping to move the dial forward. In fact, according to the guidelines, they will recommend a “withhold” vote for the chair of the nominating committee (or chair of the board, in absence of a nominating committee) where a company has not disclosed a formal written gender diversity policy and/or where there are no women directors on the board. Similarly, others are having their say too—the New York State Retirement Fund, for instance, announced that it will oppose re-election of directors at hundreds of public companies that do not have any women on their boards. At home on our own soil, the Government of Canada brought transparency and diversity to boardrooms with the recent assent of Bill C-25 — legislation that advances gender equality and diversity in Canada’s corporations. It’s unacceptable that women make up 48% of the workforce, but hold an estimated 14% of all Canadian board seats and approximately 22% of the board seats in Financial Post 500 companies.

The train has clearly left the station and companies that have done the work and identified gaps should be recognized as leaders. That said, board recruitment is not always easy — it takes time to find the right person for the job. That is why companies need to be strategic in their approach — which includes identifying the skills required before the board search begins. More information about purposeful board composition can be found in the Canadian Gender and Good Governance Alliance’s Directors’ Playbook.

There are a number of organizations that are dedicated and focused on helping companies find experienced, knowledgeable and qualified women corporate directors to join boards and fill gaps in skills.

Women Get On Board — as an example — is a member-based company that connects, promotes and empowers women to corporate boards. Finding the right organization to assist you with your board search is critical as they should have extensive experience matching qualified women corporate directors with the right board. It’s not just about finding a female candidate to fill a board position, it’s about finding the right woman with the right experience, knowledge, skill set and personality to work with the company’s existing board. It’s about setting both the company and the selected board member up for long-term success.

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Debbie Stojanovic is the CEO of Nealon Consulting and sits on the Advisory Board of Women Get On Board. She is a leading marketing, communications and business development executive who has extensive board experience.

Deborah Rosati is a leading and serving corporate director and, founder and CEO of Women Get On Board.

Thank you to Paul Gryglewicz, Senior Partner of Global Governance Advisors who also contributed to this article.

 

Network Mapping Your Way onto a Board

Joining a board is about fit and style. The Board wants to make sure that your style will fit in. To help them decide, think about your network and how you might be connected to any one of the Board members. This is what I call “network mapping.” Use your network to map how you might be connected to members of the Board. The more connections you have to the Board, the more comfort they can get on how you will fit in. Don’t be afraid to ask for introductions!

To help you map your network, it is important to understand who can help connect you to a board opportunity. Your network can be broken into the following groups:

Decision Makers: these are individuals that will make the final decision on who will join their board. These include: board members, in particular, the Chair of the Board and Chair of the Nominating Committee.

Connectors: Connectors make change happen through people. These are individuals that will connect you to board members, CEOs and Executives of a company you would like to serve on. Examples may include: Lawyers, Accountants and other professional service firms and thought leaders. Refer to my blog post: “Are you a Connector?” http://deborahrosati.ca/2015/06/are-you-a-connector/

Mentors: Mentoring is about advising. These are individuals that inspire others in achieving their best and find joy in encouraging them to make a difference. For more on mentors, please refer to my blog post: http://deborahrosati.ca/2015/03/the-power-of-mentoring

Sponsors: Where mentoring is about advising, sponsoring is about acting. Sponsors are typically Executive Sponsors inside your company. They are willing to put your name forward for board opportunities. Sponsors may also be individuals you have worked with in the past who believe in you. When you are looking for a sponsor, remember that it is a two-way relationship based on mutual respect and trust. You both need to be invested. Your sponsor is putting their name on the line by championing you, so you need to follow through with their advice and work hard to keep your sponsor’s good reputation intact. For more on Sponsors, see my blog post: “The Power of Sponsoring”: http://deborahrosati.ca/2015/05/the-power-of-sponsoring/

Organizations: Think about the organizations you are affiliated with, your alma mater, not-for-profits, professional organizations/associations and member based organizations (like-CPA Canada, CBA, GPC etc.) and how you can leverage these organizations.

Network mapping your way onto a board is an ongoing process-that you need to be strategic in connecting to your network. To your networking!

Are You Diversifying Your Board Portfolio?

I began my board journey without the thought of diversifying my board portfolio. In saying “board portfolio”, I am referring to the various boards you lead and serve on. These boards collectively make up your board portfolio. Analogous to your investment portfolio, you want to be strategic in developing your board portfolio to accurately reflect your risk profile and the stage/age of your career. Just like your investment portfolio, you should monitor and review your board portfolio on a regular basis to ensure you are getting a return on your board portfolio.

When thinking of diversifying your board portfolio, here are three key areas for consideration:

1. Consider the Evolution of Your Board Journey

In evaluating the evolution of your board journey, you may think about the size and stage of the boards you serve on. For example, if you join the board of an emerging company, the director’s role is often weighted to a value-add role and more hands-on. As the company matures, the role may become more weighted to an oversight role. To better understand your role on a board, please refer to my previous blog post here.

With that said, it is important to consider the time commitment required for each board you serve on. Each board you serve on will go through different stages as a company. These include: emerging, growth, transformation, downsizing and possibly restructuring. Each stage that a company goes through will require different time commitments, so it is critical to be aware of the amount of time you have for each board you serve on.

In being aware of the stages a company goes through, it is important to consider that each board you serve on will be faced with different governance issues during your tenure that will add to your board governance experience. Some governance issues that you might face as a board member include: CEO succession/development, M&A transaction, IPO, major investments, disruption in the industry.

Each stage a board cycles through may present a new or different pace at which they work, depending on what issues the company faces. As a colleague of mine, Tamara Paton, a serving Corporate Director states:  “Even the pace of change facing an organization can give us fresh insight into how organizations work, how to motivate and compensate executives, and how to anticipate disruption.”

As your board journey matures, consider taking on governance leadership roles. As you evolve in your governance experience, you may consider stepping up in leadership roles as a Chair of respective committees you serve on. As a Chair, you learn to: i) generate dialogue among your board colleagues, and ii) facilitate the committee to make informed decisions. Both experiences prove invaluable in advancing your skills as a member on a board and in diversifying your board experience.

2. Consider Going Outside Your Comfort Zone

When looking to go outside of your comfort zone, ask yourself the following questions:

Have you thought about diversifying your board portfolio by joining boards that are in new industries or sectors? While joining a board in a new industry or sector may present some level of risk, it may also offer an exciting opportunity to expand your skillset. For example, I joined a Canadian Medical cannabis company board that recently went public (see: MedReleaf, TSX-LEAF: https://medreleaf.com). I was initially considered for this board because of my financial expertise, public company, retail/consumer and regulated industry experience. For me, joining MedReleaf offered an opportunity to take learnings from other industries and apply them to the newly emerging cannabis industry.

Have you considered joining a new committee?  I am typically asked to join an Audit Committee because of my financial expertise. However, sometimes it is valuable to venture outside your comfort zone and serve on a committee that will present a steep learning curve. You may bring different perspectives and new ways of looking at governance/business matters the board is facing and prove to be an asset to the committee. Branching out and joining a new committee may open the doors to other opportunities. For example, sometimes a Special Committee (SC), – comprised of independent board members is formed to address unique issues facing the company. The SC issues may include: CEO search, a significant transaction or a special investigation. Such experiences provide unique and challenging learning opportunities where you will learn new skills which you can apply to boards you are already serving on.

When is the last time you took risks or challenged yourself regarding your board portfolio?

When you join a new board or committee, you are provided the opportunity to meet new people outside of your current network. I have joined boards where I was the “outsider” to the existing board and had to “earn trust and credibility” of my board colleagues. It takes time and you need to show up, be prepared, listen and ask questions. While intimidating at first, expanding your network provides the opportunity to learn from others with different industry experience.

3. Other Issues to Consider When Diversifying Your Board Portfolio

Of vital importance for consideration when taking on new board opportunities is the corporate calendar and the fiscal year-ends. If you have several corporate boards with a fiscal year-end of December 31st, you may experience conflicting demands in regards to your time and schedule. As many of us know, fiscal year-end presents a demanding financial reporting period.

Of final consideration when looking to diversify your board portfolio is board compensation. As a Corporate Director, your board compensation can vary depending on the size and stage of the company you are serving as a board member. There are some good references on board compensation that can be found here: “Canadian Spencer Stuart Board Index 2016 – Board Trends and Practices of Leading Canadian Companies”

When you are thinking about diversifying your board portfolio, the type of board compensation is a consideration. Are you prepared to receive 100% equity based in the form of Deferred Share Units (DSUs) or a mix of cash and equity?  Your board compensation may also depend on the committees you serve on and whether you chair the board or a committee.

As you consider new board opportunities, it is important to consider diversifying one’s board portfolio, otherwise why join a new board?

Are You Thinking of Creating an Advisory Board?

I’m often asked about whether an emerging company should create an Advisory Board versus forming a governance fiduciary board. My response to entrepreneurs thinking of creating an Advisory Board is to be strategic in the formation of your Advisory Board.

An Advisory Board is not a Board of Directors with legal and fiduciary responsibilities. In contrast, an Advisory Board does not have any formal legal responsibilities and liabilities. Rather, an Advisory Board is created by the CEO of the company to get advice and support.

Over the years I have been invited to serve on Advisory Boards & Councils and have enjoyed providing strategic advice and guidance. More recently, I had the opportunity to create an Advisory Board for Women Get On Board, consisting of members with experience and connections in governance, law, investment banking, accounting, financial services, corporate finance, mergers and acquisitions, professional development, and media. Thank you all for your commitment and support to help us fulfill our mandate to connect, promote and empower women to corporate boards.

Five key strategic considerations when creating an Advisory Board:

1. What is the purpose of this Advisory Board?

Usually an emerging company creates an Advisory Board to augment the talent on the leadership team with accomplished and connected business leaders. These business leaders are thought leaders, connectors and influencers that will use their network to make connections and provide strategic guidance and expertise to help accelerate growth, manage risk and enhance operational performance.

2. Who do you want to invite on your Advisory Board and what is the value they will add?

First of all, you will want to prepare a skills matrix to identify the skills/expertise you need on your Advisory Board. You may want to bring in business leaders who have skills/expertise in areas like Digital Media, Private Equity & Venture Capital M&A, Capital Markets, IT, Sales and Marketing, as well as knowledge of the industry. It also helpful for prospective Advisory Board members, know the company they keep!

3. How would you compensate your Advisory Board members?

If you are an emerging company, cash is king. You can certainly grant some form of stock options or equity to the Advisory Board for their time and their network. Or maybe it is about these business leaders paying it forward and helping an emerging company with its strategic planning, access to capital and customer introductions.

4. Should there be term limits and is there a succession plan?

It is important when you ask someone to join your Advisory Board to define the expectation of their time commitment. Most Advisory Boards that I have been involved with typically have a 2 to 3-year term and meet 3 to 4 times a year in person. Sometimes there is a sub-committee that you will be asked to serve on, and occasionally there will be calls with the CEO on as-needed basis.

As you build your Advisory Board the skills/expertise you need in the early formation of your emerging company may be different as you grow. Be mindful of your succession plan for renewal of your Advisory Board members.

5. What is the mandate of the Advisory Board?

Do you have a terms of reference or a mandate for the Advisory Board that describes the following items?

Expectation – What is the expectation of the role of your Advisory Board members. Is it to provide strategic guidance, for introductions, or to attend meetings?

Time Commitment – Is there a meeting schedule? How often will you meet?

Term Limits – How long is the term?

Compensation Terms – Is it a “pay it forward” or are there stock options or some form of equity, or a retainer?

Marketing – Will you be showcasing your Advisory Board members on your website and other marketing materials?

Once you have thought through these five key strategic considerations on creating an Advisory Board, it is really up to the entrepreneur to engage members of their Advisory Board. The more engaged your Advisory Board members are the more they can help you grow your emerging company!