Know the Boundaries Between Board and Management
In board meetings, be aware of who is responsible for what.
When Michael Sneed wonders if he is performing his duties as a board member in a satisfactory fashion, he simply asks himself one question.
“Is this a management issue or a board issue?”
Sneed has seen both sides of the board/management dynamic. He recently retired from his role as executive vice president, global corporate affairs, and chief communications officer for Johnson & Johnson, and now serves as a board member of Wayfair and a vice chairman of the board of trustees at Thomas Jefferson University. Evidently, there’s nothing like dealing with an overstepping board when it comes to helping remind you of what your own duties as a director are.
“As someone who used to work in the operations of a company, I used to chafe when I heard about what certain board members were asking about,” says Sneed. “I used to say, ‘That’s management’s job, not the board’s.’”
According to Sneed, the board’s role is fairly limited, consisting mostly of choosing the CEO, governance and “certain regulatory responsibilities.” However, it has also allowed him to see the value of proper board composition and ensuring that the board includes varied points of view.
“I do think that the best CEOs recognize that you want to have a board that has different perspectives,” says Sneed. “Having the same point of view as 12 other people would be a waste of my time. But as a board member, you also have to realize that you are not the one running the company.”
Of course, the old adage of “noses in, fingers out” does tend to become a little more difficult for a director who has concrete experience in running and growing a successful company. But just as you often have to do for your children, it is sometimes valuable to let management grow from their mistakes … with limitations, naturally.
Sneed notes that it can be hard to let management run the show, “particularly if you’re someone who has been on the other side, you’ve been an executive, you’ve run a company, you know what they’re about to face and you know you can do it better. But part of it is about learning. As a board member, you want to make sure the company isn’t going to get to the point where they’re going to harm themselves. But sometimes, as a company, you need that collective experience to go through and then you’re better on the other side.”
While Sneed warns against the effect of a board that tries to do a CEO’s job, he says that the opposite can be just as dangerous: a board that is too deferential to the opinions of the lead executive. When he was an executive, he recalls, he wanted to hear the board’s challenges and concerns, and he would always push the board to go further in their oversight duties. While board members should strive not to be a constant adversary, they should also ensure that they are not going along with the CEO unquestioningly.
“Make sure that the company is taking advantage of the value and perspective that you have,” says Sneed. “If you’re just sitting there with your mouth closed and really deferring to management, that’s not a good thing for an organization.”
It turns out that providing value and perspective for an organization can be hard work. In fact, Sneed notes that being on a board is “not for the faint of heart.” He points to several factors that have made board service a large commitment, including increased levels of expectations from stakeholder groups and more widespread use of the Internet and social media, which makes it easier to identify board members and criticize their decisions. He notes that most boards end up requiring two to three hours of work per week, a number that can rise quickly if you are on more than one board or if you are a member of a committee. Plus, there’s the unforeseen responsibilities.
“You have to assume there is going to be things you’re just not aware of that are going to take place,” says Sneed, mentioning the CEO search he finds himself in the middle of as he speaks. “Look, I love it, but it’s a commitment. You have to have that bandwidth to manage things that you don’t expect will come up and still be an effective board member.”