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Corporate Board Journey

Understanding Your Role on a Board

Originally posted on September 15, 2015.

There are two roles you must play on a Board, one is Oversight and the other is Value-add.  I will highlight both roles with an extract from a chapter that I co-authored with Donna Price in 2008’s Entrepreneurial Effect by James Bowen and Glenn Cheriton, titled Corporate Governance-Directors of Emerging Companies.

(To promote understanding of a director’s role on a board and how to prepare for board opportunities, I am again co-facilitating Women Get On Board’s Getting Board-ready workshops from October to December 2016. Learn more about them here: http://womengetonboard.ca/workshops/.  Hope to see you there!)

The Oversight role on a Board

“The primary responsibility of directors is to oversee the management of the business and affairs of a corporation. This is referred to as an oversight duty. As a general matter, a business corporation’s objective in conducting business is to create and increase shareholder value. To this end, in addition to performing an oversight duty, boards also perform a value-added role. Decision-making generally involves developing corporate policy and strategic goals with management and taking actions on specific matters related to those policies and goals. Other matters, such as changes in the charter documents, election of officers, (and other matters referred to above), require board action (and sometimes shareholder action) as a matter of law.

All directors must understand that decision-making and oversight responsibilities come from prescribed standards of duty and conduct.

The corporate statutes impose two principal duties on directors: A fiduciary duty and a duty of care. As fiduciaries, directors have an obligation to act honestly and in good faith with a view to the best interests of the corporation.

As a director, you must exercise the care, diligence and skill that a reasonably prudent person would exercise in comparable circumstances. This is known as the duty of care. In discharging the duty of care, a director must be concerned about process at least as much as, and perhaps more than, the actual decision taken. The duty of care underscores the need to implement corporate governance procedures to guide the board in decision-making. This means that pre-meeting, meeting and post-meeting practices should be oriented to providing the right information within a timeframe that will permit diligent discussion and decision. If a board makes a decision that may be contentious from a business perspective, provided the board gave sufficient thought and consideration to the decisions and were otherwise diligent, it will not normally be criticized. This is sometimes referred to as the “business judgment rule” and generally speaking, courts will not substitute court judgment for the business judgment of the board.”

The Value-Add Role on a Board

“In the formative years of an emerging company, the director’s role is more often weighted to a value-add role and as the company matures the role becomes more weighted to an oversight role.

Keeping in mind that the overall role of the board is to maximize shareholder value, directors also provide a level of insight, business acumen and personal network that extends beyond the company’s management team. These are some of the components that contribute to a director’s value-added performance.

The collective board should have sufficient industry knowledge and domain expertise (such as technical, operational or governance) in order to add value to board decisions and strategic priorities. Paramount to their duties, directors must select and oversee the CEO and monitor company performance. A value-added board should provide insight, advice and support to the CEO and management on key decisions and issues confronting the emerging company. Caution: “Nose in, Fingers out!” Boards must balance being too engaged in the day-to-day operations, with performing an oversight role.”

Women Get On Board presents Getting Board-Ready Workshops

These workshops help women gain insights and learn about the skills they need to prepare for board opportunities. Each half-day workshop will be facilitated by corporate directors and governance experts.

Understanding your role on a Board,  Wednesday, October 5, 2016; http://bit.ly/WorkshopOct5

How to prepare yourself for Board Roles, Wednesday, November 2, 2016; http://bit.ly/WorkshopNov2

How to get yourself on a Board, Wednesday, December 7, 2016; http://bit.ly/WorkshopDec7

Top 10 Tips to Help You in Your Journey to a Corporate Board

Being a Corporate Director is much different than being an executive. A Corporate Director’s role is one of oversight whereas an executive’s role is to manage day-to-day operations. Getting yourself board-ready is a journey where you need to be realistic in your skills, experience and value you bring to a board. You also need to be mindful that it is a very competitive marketplace. There is an over-supply of qualified Corporate Directors for a limited supply of available corporate board seats.

As a Corporate Director and co-founder of Women Get On Board, my goal is to help executives make that transition effectively. This is why I want to share my top 10 tips to help you in your journey to a corporate board.

  1. Be fearless — use your confidence to embrace change.
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    Be independent minded and stand up for what you believe in.
    ~Do the right thing and be ethical in your decisions.
    ~Have courage, be brave, be decisive and be determined.
  1. Plan your journey, set goals and plan the path to your success.
    ~
    Be aspirational in your goals. What do you have a strong desire, longing, aim or ambition for.
    ~Think outside your comfort zone. Where do you want to be in 5 years, 10 years or maybe even 20 years from today?
    ~Tell your inner circle about your journey, goals and/or plans for your future.
  1. Be curious — explore new opportunities and solve problems.
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    Don’t be afraid to ask questions; seek to understand.
    ~Look for ways to re-invent yourself.
    ~Change is good, change is inevitable, so make change part of your life.
  1. Get involved in your community.
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    Seek out not-for-profit board opportunities.
    ~Volunteer for a cause that you care about.
    ~You will meet new people outside of your current business circle that you can help make a difference. 
  1. Continuous learning — invest in your professional development.
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    As professionals we have continuing professional development requirements…go beyond your requirements.
    ~Mastery =10,000 hours in a particular skill/expertise etc.
    ~Knowledge is power, so keep learning!
  1. Be your authentic self. (From The Four Agreements by Don Miguel Ruiz)
    ~“Be Impeccable with your Word.”
    ~“Don’t take anything Personal.”
    ~“Don’t Make Assumptions.”
    ~“Always do your Best.”
  1. Network, network, network.
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    Go to events that matter to you and meet new people.
    ~Invite someone new out to lunch or coffee.
    ~Ask for introductions.
  1. Be visible — speak up and stand out.
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    Be a thought leader; post your blogs, presentations and articles on social media.
    ~Speak up/comment on topics you care about or have expertise on.
    ~Take on leadership roles.
  1. Seek out mentors and sponsors.
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    Look for a mentor outside of your organization. Find someone who inspires you.
    ~Become a mentor to others. You will learn a lot from them!
    ~Seek out a sponsor. Look for someone who will make introductions for you.
  1. Embrace and use social media to promote yourself.
    ~Enhance your profile on LinkedIn.
    ~Be active, thoughtful and relevant in your social media.
    ~Leverage your LinkedIn to attract new business, speaking and career opportunities.

If you would like more information and tips on how to prepare yourself for board roles, please visit Women Get On Board for information on the 2016 Getting Board-ready workshops. The purpose of the workshops is to help women gain insights and learn about the skills they need to prepare for board opportunities. These half-day workshops will be facilitated by corporate directors and governance experts. They will share their experiences to empower women to become more confident in order to lead and serve on boards.