You’d think board inductions would rank highly when new directors are appointed. After all, the sooner they understand the workings of the organisation, the sooner they’ll be up to speed and making a valuable contribution.
You’d be wrong, though, as there are still too many boards mired in the old-fashioned belief that people appointed to boards are so well-credentialed and experienced that they just slot in. All they need is access to a mountain of historical board papers and minutes before being sent off to peruse the material…and with a supposedly comforting ‘…if you have any questions, don’t be shy to ask.”
Unfortunately, research tells us that life doesn’t work like that. It also tells us that these papers are groaning under the weight of an army of acronyms and other gems of corporate-speak that the poor reader – even the most diligent – is soon all at sea. To compound matters, the papers are invariably prepared by management, on the assumption that the reader has intimate knowledge of the company and its operating environment.
Too embarrassed to call for help, he or she may bumble along and put up the all-knowing façade…but experience tells us these poor souls denied a good induction can take up to two years to contribute to the company in a meaningful way.
Fortunately, the flip side tells an altogether better story, that when done properly, new board members are up and running within six months. It further tells us that for board members to function at a strategic level – and that, after all, is what they’re there to do – they need an induction that gives them a solid understanding of both the internal and external dynamics.
Directors who join from a company that operates in the same sector – or they have prior experience of the sector – probably only need a number of sessions with the chair and CEO to understand the company and its modus operandi.
It’s a little trickier when the director is appointed to fill a skill gap and is not overly familiar with the sector. In these cases, a good induction into both the company and the sector is required.
Furthermore, good boards tend to have an online board portal carrying all the important documents and policies that impact on the board – things like the strategic and business plans, the budget, a glossary of acronyms and their meaning, the board’s governance charter. They also feed the new director titbits of information over a few months and, after digesting each bite, the director gets a series of one-on-one sessions with the chair, the CEO and, ideally, senior managers.
These inductions may also require the director to undertake a specialised governance course, either at an educational institution or via subscription to something like our new world-first online portal subscription, Board Minded, that’s designed to keep time-poor directors abreast of best practice.
Subscribers get a broad selection of online presentations, delivered by some of the best brains in the business, which they’re free to watch as a group or individually, as often as they please and always at a time that’s most convenient.
So why not take it for a test drive? Go to www.governancematters.com.au, click on a complimentary topic such as ‘Understanding Good Governance’ and get a feel for what it’s all about.
Until next time