Private Company Director

How to Onboard New Directors

The better the introduction, the sooner the board member can make meaningful contributions.

A thoughtfully planned and successfully executed onboarding process can make all the difference in ensuring the success of a new board member.

It can take a private company months to find the perfect candidate to join its board of directors. Private company leadership must find someone who has the right blend of personal traits, experience, skill sets and access to outside resources and connections to help the board and company meet their goals. But once that perfect person has been hired, many companies fall short when it comes to successfully integrating the new director into the board. The results can be frustrating — for both the company and the new director. There are some simple steps companies can take to maximize the effectiveness of the onboarding process while minimizing headaches.

First, let go of the notion that the process of bringing a new board member up to speed can be accomplished in the span of a few short meetings and a document dump. As with any new position, onboarding takes time and should follow a well-thought-out process designed to be consistent and repeatable, including regular check-ins and opportunities for feedback along the way. Trying to accomplish too much too soon will have the new board member feeling like they are drinking from a firehose. While the incoming director might bring industry expertise and desired skill sets, they will require time to learn your organization’s history and industry. They will also need to understand how your unique board works, as well as the group’s culture and interpersonal dynamics — especially if there are family members on the board or senior management team.

Here are some tips that will help smooth out this process, reduce frustration and allow the new board member to quickly contribute in a meaningful way.

Create a director onboarding plan

An efficient onboarding process takes time. It is unrealistic to expect someone to understand a new company and its nuances in a very short period.
 
The board’s nominating/governance committee should take point on crafting the plan, with support from the senior management team and corporate secretary (or other support staff). The plan should include the goals of the onboarding process, a list of important documents to provide to the incoming board member and a record of the key people and teams that the new director should meet. 

It’s also helpful to create a list of names for the new director to know: not just people, but also organizations, associations, regulatory bodies and other influential groups important to your company and industry. The plan should include a schedule of meetings, educational sessions and other important events that will take place across the director’s first year. Make sure to include time for feedback and regular check-ins (perhaps every other month) with different leaders, such as the board chair, nom/gov chair, CEO and division leaders, throughout the first year. And a pro tip: Make sure to schedule one of the check-in calls with the board chair to take place a day or so after the new director’s first board meeting.

Documents to include in the onboarding packet

The new director should receive copies of essential documents from the corporate secretary or board liaison. The specific documents they might need will vary from company to company, and will also depend on which committees the new member joins, but the basic package should include:
•    Board bylaws. Your new director will need to know the expectations of board members, structure of the board and committees, and mechanisms to replace members from either termination or resignation. The bylaws should include these and other pertinent details of how your company is governed.
•    Committee charters. These mandates will spell out the duties and responsibilities of each committee and can help the incoming director understand where they might best fit.
•    Strategic plan and quarterly/annual goals. This will be the road map for both the company’s future and its immediate targets. A new director needs to understand where the company wants to go in both the short and long term.
•    Minutes from the last year of board and committee meetings. The minutes paint a picture of how key decisions were made and help the new member gain insight into the dynamics of the board. 
•    Approved budget and the audited financial results. It is important to know where money is allocated, how the company did and priorities for the organization.
•    Names and bios of other board members and the executive team, plus an organizational chart. It is useful to know the other board members and executives, their backgrounds and the experiences they bring to the table. 
•    Brief history of the company and overview of current operations. This does not need to be exhaustive, but a quick summary of the company’s beginnings, a timeline of key milestones and a high-level summary of how the company is now structured can provide valuable context.

Organizations can choose to send more documentation to new board members. However, at some point, the law of diminishing returns sets in. While it might be interesting for a new board member to review the story of a product’s name, it may not be helpful to the current situation.

The big meet-and-greet

Most companies arrange for a new board member to meet with the chair, the CEO and other board members individually as part of the onboarding process. However, they should also meet with other senior leaders in the organization, including members of the C-suite, division heads and other essential executives. From these meetings, the new board member will get a better understanding of the strategy of the company and its various units, as well as deeper insights into the most significant risk or challenge areas.

The new board member should be given sufficient documentation of each person’s area of expertise before the meeting so they can prepare to ask questions. These meetings should also be spaced out — having multiple appointments in one or two days will be overwhelming to the new director and won’t give them the best chance of retaining critical information. Rather, schedule the meetings across the first six months of the new director’s tenure. By giving them time to reflect on each meeting, they can ask further questions or offer a new solution to a problem. The key is to make the new member an active participant in the learning process.

The importance of relationships

Business, at its most basic level, is built on relationships. The greatest challenge for new directors is finding opportunities to build meaningful relationships with other board members. Yet, having solid ties is essential to creating trust. Without trust, a board cannot function effectively.
 
That said, trust will not just “happen.” It must be cultivated, particularly among board members. Directors often meet up only a handful of times each year, and, when they are together, directors tend to gravitate to those whom they know well. That can make it difficult for new members to build these vital relationships.
 
One successful strategy is having the board chair speak regularly with the new member. These do not need to be lengthy meetings. They could be as short as 10-minute phone calls. The chair plays a key role in establishing the board’s culture. By being proactive in getting to know the new director, the chair sets the tone for the rest of the board to follow. If the new director joins a committee, the same advice goes for the committee’s chair. These conversations are an opportunity to let the chair and new member get to know each other on a personal level, discuss the company and its inner workings, and allow the new member to ask questions.

The buddy system

Even for the most seasoned professional, joining a new organization can be stressful. Having someone act as a guide can improve the onboarding experience. Assign every incoming director a “board buddy” who can explain the idiosyncratic way the company and board operates, be available to answer questions that arise, introduce the new director to key people and show them around the office or other facilities before and after board meetings. Having a more intimate relationship will also allow the new director to gain an informed understanding of how the various board members operate.
 
While the onboarding process is more like a marathon than a sprint, it is crucial to execute it correctly. Once a new director is comfortable and understands the business and its goals, they will be better positioned to make meaningful contributions. Gaining in-depth knowledge about an operation does not happen overnight, but a new director must understand where the company is, where it is going and how it plans to get there. Armed with that knowledge, they’ll be well-positioned to be a valuable addition to the board. 

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Dottie Schindlinger is executive director of the Diligent Institute, the corporate governance research arm and think tank of Diligent Corporation. 
 

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