Know board resources and ask the right questions.
When new directors join a board, they come equipped with tremendous experience, copious contacts and a history of helping companies grow and succeed. However valuable that may sound, it isn’t worth much if company leadership doesn’t know how to leverage what board members bring to the table.
To get an idea of how private companies can best take advantage of board members’ experience and contacts, we spoke with two of our 2022 Private Company Director Magazine Directors to Watch: W. Steve Albrecht, who serves on the board of the privately held Larry H. Miller Group of Companies as well as SkyWest Airlines, and Glenn Wilson, board member for Michigan Housing Council and Mass Transportation Authority, and advisory board member for ELGA Credit Union, Flagstar Bank, Federal Home Loan Bank of Indianapolis and more.
Albrecht says that most boards he’s served on have done a suitable job of leveraging his contacts. As a result of his recommendations, boards have been able to engage investment bankers, outside legal counsel, CPA firms and search firms with whom Albrecht had previous business relationships.
“But I’ve also seen situations where CEOs didn’t leverage their boards for the resources they could have,” says Albrecht. “They missed out on opportunities to benefit from the board’s knowledge.”
As a helpful tip for company leadership looking to take full advantage of their board’s expertise, he recommends that the management team ask each board member to provide a list of contacts and resources that they would recommend for different business challenges and scenarios.
“Company leaders can then compile that into a list with which all members of the board and management are familiar. When help is needed, the list can be discussed and the appropriate resource tapped.”
Wilson, 37, says leadership is often hesitant to take full advantage of younger directors’ expertise.
On some (though not all) boards he has served on, Wilson observes, “Leadership can feel as though I do not have the ‘time in’ to have a depth of relationships. Sometimes, they don’t realize that my relationships can be beneficial to the bottom line and further the company’s mission.”
Like Albrecht, Wilson recommends that company leadership step up their efforts to tap their board’s connections.
“Companies should always include in their onboarding and annual processes a tool to map connections in and across sectors. These relationships can engage board members at a higher level and result in advantages for the company.”
A question of questions
One of the ways companies can better mine their board’s expertise is by asking better questions. Or, as Wilson says, by making sure there is time during board meetings to ask questions, period.
“Often, board meetings devolve into a reading of reports. Companies miss out on the strategic thinking with which quality board leaders can assist.”
Wilson says he wishes some management teams would focus more on issues like opportunities being missed, public perception of the company and emerging technologies or innovations that could bolster the organization’s work. He suggests that even more personal queries, such as whether board members believe company staff appreciates their input, could ultimately improve the work of the board.
Albrecht concurs with Wilson on the topic of how board time is best used. He believes that board meetings need to include less recitation and more conversation.
“It should be assumed that all board members have read and studied the materials prior to board meetings,” Albrecht notes. “One of my boards provides a list of questions that they would like the board members to think about. In the meeting, we focus on those questions. It makes for a great discussion and a productive meeting.”
Albrecht believes that communication is key to board success, whether it’s between senior leadership and board members or board members and other “less senior” members of the staff. For instance, he states that CEOs should make sure to prioritize a call to each board member between meetings to discuss the most pressing issues on their minds and to determine what should be discussed at the next board meeting. He makes it a point to arrive at each board meeting a day early to speak with people “two to three levels down in the organization,” like controllers, internal audit staff or accountants.
“Not only do they appreciate me spending time with them and gaining their perspective, but I learn what their concerns are and what questions I should be asking in the board meeting.”
Even if good questions are being asked, the board must be given ample time to discuss solutions, Wilson points out.
“I’m concerned when I’m asked to weigh in on a plan where I have no opportunity to suggest changes or improvements.”
Albrecht looks at the issue from another perspective. Instead of focusing on the questions he is being asked, he zeroes in on board members’ responsibility to make their areas of mastery clear.
“Board members should be assertive enough to be able to say to a CEO or a CFO, ‘That is not my level of expertise, so I’m not sure I’m the right person to ask. I suggest you talk to so-and-so about that.’”
However, he makes clear that part of board service is becoming fluent in as many aspects of a company’s business as possible. He explains that, even if he is serving on a board with a focus as intricate and complex as a software and technological company, he works hard to nail down the intricacies.
“There is no excuse for someone to not try to be the best-read and best-prepared member on the board,” he says. “While we all have different areas of expertise, we should do everything possible to elevate the discussion in the room.”