26 Nov 2019
What makes a successful corporate director?
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Successful directors tend to have a complex mixture of professional competency, work ethic, vision and collaborative skills, as our guide explains.
Like any position, a CFO must have the necessary skillset, but that is not the full story.
Skillset can be roughly defined as a person’s professional roles and accomplishments. It’s what you’re good at and what specialty you can bring to the board.
In the old-fashioned boardroom, one or two specialists (generally with financial or legal experience) would sit alongside seven or eight generalists, usually individuals with prior experience in corporate governance or as an executive in another industry.
The modern board, by contrast, is a medley of industry-relevant specialists. Each member is expected to contribute a particular strategic perspective to their organization. Nowadays, companies often begin their search for a director by identifying the skillset they would like to add to the board.
Successful directors now bring a unique, relevant, and (most importantly) current skillset to the boardroom. For this reason, it is imperative that in preparing yourself for a board position, you identify exactly what kind of skillset you can offer.
If your skillset is what gets you noticed for a board position, your mindset is what differentiates you from rivals with similar backgrounds.
For two finalist candidates with comparable financial expertise, subtle differences of temperament and mindset will decide which one gets the job.
There is, of course, no single mindset that correlates completely with directorial success. People are different. Indeed, the point of the corporate board as an institution is to achieve wisdom through the integration of those differences.
But there are a number of behavioral (“mindset”) traits that are shared by most good directors.
Good directors are balanced and persistent judges
Directors are expected to see the big picture, weighing their company’s present trajectory against its goals and the various obstacles that appear on the horizon.
Because CEOs average about five years in their positions, the board (directors generally serve longer) gives the company a stability of oversight, helping weather executive transitions and retain a continuity of purpose.
One aspect of this and one of the board’s most important jobs is judging the management team’s fitness to steer the company. This is especially difficult since “fitness” is not constant.
The right leader can, as the result of either internal or external changes, quickly become the wrong leader. An initially ineffective leader can learn from mistakes and go on to achieve success. And a leader with a track record of stunning competence may stumble briefly, requiring minor, board-led correction.
A CEO who’s an extremely effective leader of a medium-sized company may prove less capable when the company doubles its size.
Companies sometimes outgrow their executives.
In any case, it is the board’s duty to notice, measure, and act. To do this effectively, board members must be proactive, fair, and consistent judges of other people.
Good directors are skeptics
The mythical (or bad) board member has his head in the clouds.
He or she doesn’t concern himself with nuance and makes decisions quickly, relying on data summaries rather than the data itself.
That person is exclusively concerned with the big picture and spends time outside the boardroom trying not to think about the boardroom.
Good directors, the real directors, are skeptics. They are uncomfortable following impulses, whether they belong to themselves or others. They want to see the data and have a fluent grasp of all the options before they make up their mind.
Consequently, they work hard. They put in the hours outside the boardroom to gain a nuanced understanding of the company’s situation. And then, when they get into the boardroom, they are willing to share their findings while also entertaining insights that they themselves have not yet appreciated.
“Good directors are collaborators. A well-balanced board is composed of directors with different backgrounds, different processing methods, and different micro-goals.”
Good directors see the big picture as well
Taking the long view is both a privilege and a duty for the corporate director. Directors get to think on a time scale beyond the management horizon. They actively interrogate the company’s long-term image, its strategy, and its five- and ten-year goals.
But there is difficulty in this.
Directors have to be good at balancing their vision for the company with its present realities.
They need to be capable of turning goals into reality and transforming conceptual plans into actionable strategies. They also need to be persistent when it comes to evaluating the goals for the company against its present situation.
One of the most important questions a director can ask about a company is “Why are we in this business?”
Good directors are collaborators
A well- balanced board is composed of directors with different backgrounds, different processing methods, and different micro-goals.
There will be times when directors conflict with one another. What seems like a viable solution to one may seem unworkable to another.
Good directors thrive in this context, willing to talk and listen, teach and be taught. They recognize that the strength of the board as an institution is in its self- correcting constituency.
Board members are meant to offset the blind spots of their fellow board members and the executives they oversee.
The mindset of educator and collaborator is crucial. An irony of a modern director’s specialization is that the more specific a candidate’s expertise, the more likely it is that their ability to collaborate will be scrutinized. Why? Because boards are meant to be collaborative. A cybersecurity expert, for example, is not supposed to be the sole arbiter of all issues related to cyber risk. Instead, her role is to effectively educate the board about her area of expertise, thus allowing the board to collectively make decisions.
Good directors are socially savvy
They are adept at measuring personalities and know how to deliver information to different kinds of people.
Some people respond best to Socratic guidance. In this case, directors must earn their trust and steer policy by asking questions, not by giving orders. Other people respond better to more direct recommendations, in which case it may be best to deliver blunt and immediately actionable guidance.
The best board members, like politicians, can structure their advice around the emotional and intellectual needs of the people to whom it is addressed.
The Odgers Berndtson executive search guide to your first board seat offers advice on what makes a good director and how to position yourself best to succeed when stepping up.
We’ve drawn on our experience of leading hundreds of successful executive searches for board members for some of the world’s leading companies. We’ve also considered our clients’ changing expectations and needs when appointing their board members, and reflected on trends across the global Odgers Berndtson executive search network.
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