Networks Crucial for Board Success
Charged with making critical decisions that shape the trajectory of an organisation, board directors shoulder significant responsibility. For this reason, directors are appointed for the many skills they can offer a board. While individual expertise and experience are considered paramount, building and maintaining a strong network can greatly benefit board directors.
The impact of the pandemic on professional networks was significant. The once frequent opportunities to engage with colleagues and associates were restricted, if not prevented entirely. It weakened the bonds between people, sometimes to the point of breaking, and many once-thriving network connections remained disengaged. Reduced travel time to attend board meetings initially provided directors efficiency benefits. Yet, directors gradually saw the advantages of restoring in-person meetings with their board colleagues, leading to improved dynamics and stronger connections.
In truth, for many, the networking world has been reshaped, with fewer opportunities for regular and quality in-person engagements. Establishing work-from-home patterns has discouraged people from seeking out networking possibilities, and while efficient, virtual alternatives have proven largely ineffective in maintaining relationships, let alone creating new ones. This impairment of professional networks continues to affect employees’ productivity throughout organisations, and board directors are not exempt. For directors, networking is a strategic imperative. A strong and functioning network makes directors valuable to the boards they serve and contributes to the effectiveness with which they discharge their duties.
As directors consider their relevance, the value they add, their ongoing service to a board, and their board career, they also have reasons to consider the strength of their networks. We explore compelling reasons why cultivating a robust network is crucial for board directors:
Enhanced Board Effectiveness and Performance:
A well-connected board director is better equipped to fulfil their governance responsibilities effectively. Building relationships with fellow directors, executives, shareholders, and stakeholders fosters boardroom trust, collaboration, and camaraderie. Strong interpersonal connections enable smoother communication, more constructive debates, and stronger alignment around strategic priorities. Moreover, a robust network enables board directors to tap into collective intelligence; leverage shared resources, and access specialised expertise when addressing complex challenges or exploring new opportunities. A cohesive and well-connected board is better positioned to drive organisational performance and value creation.
Across the investment chain, boards are tasked with different requirements in their service to the company. In start-ups and emerging growth companies, the support a director can offer a CEO and management in identifying strategic opportunities to raise capital or establish crucial partnerships can be vital. These activities require directors with well-maintained networks capable of bringing about value-creating transactions or exits. Simply knowing people is often inadequate, as directors need influence in a relationship, which requires sustained investment in their network.
Access to Diverse Perspectives:
Effective decision-making hinges on considering a wide range of perspectives. By actively engaging with a diverse network of professionals from various industries, backgrounds, and expertise, board directors gain access to a wealth of insights and viewpoints. These diverse perspectives can help board directors anticipate challenges, identify opportunities, and make more informed decisions that drive organisational success. Whether it’s seeking advice on regulatory changes, understanding market trends, or exploring new business strategies, a well-connected network provides invaluable perspectives that enrich board deliberations.
While collectively tasked with maximising success for the company and value for the stakeholders, directors can be required to navigate challenging board dynamics individually. Often, these amount to nothing but small ripples, but in cases where there are more substantive issues in play, even to the extent the director might consider resigning from the board, the advice and counsel of suitably experienced colleagues who understand the context of the situation, can be beneficial to work through the problem and land on a suitable remedy or alternative course of action.
Opportunities for Learning and Development:
For board directors to stay abreast of emerging trends, best practices, and industry developments, continuous learning is essential. Networking offers a dynamic platform for ongoing education and professional development. Through interactions with peers, mentors, industry leaders, and subject matter experts, board directors can exchange knowledge, share experiences, and gain insights into cutting-edge strategies and technologies.
Boards and their constituent directors add their greatest value during challenging times when upside and downside risks to the company are elevated. It is difficult to overstate the utility of networks to board directors during such times. Directors should wish to maintain relevant insights across many topics as companies are confronting rapid technology innovation, growing regulatory and governance requirements, and a spectrum of other pressures across the business, environmental, political, and social paradigms. While formal board education is gaining popularity, many board directors’ network connections provide opportunities to broaden their knowledge and expertise and enhance their effectiveness in governing the organisation. More specifically, it can offer the chance to familiarise themselves with a matter from the vantage point of a board member, cutting through some of the noise.
Increased Visibility and Influence:
Networking isn’t just about who you know; it’s also about who knows you. A strong presence within relevant professional circles enhances a board director’s visibility and credibility in the industry. Actively participating in trade bodies, industry forums, alliances, thought leadership initiatives, and networking events elevates a director’s profile and reinforces their reputation as a trusted leader and strategic thinker. Enhanced visibility opens doors to new opportunities, such as board nominations or advisory roles, and amplifies a director’s influence within their organisation and the broader business community. By leveraging their network effectively, board directors can advocate for their organisation’s interests, champion key initiatives, and drive positive change.
Strategic Board Recruitment and Succession Planning:
Building a diverse and high-performing board requires careful consideration of skills, experience, and perspectives. Networking is crucial in identifying and attracting top talent to the boardroom. By nurturing relationships with potential candidates, executive recruiters, and industry leaders, board directors can proactively scout for individuals who bring complementary skills and fresh perspectives to the board. Furthermore, maintaining a strong network facilitates better succession planning by increasing the likelihood of a diverse pipeline of qualified candidates for future board vacancies.
The board of directors is a comparatively small and cohesive team that functions effectively with members who consider interpersonal dynamics positive. Comprising a board of well-networked individuals can support director recruitment but also check and verify the compatibility of prospective appointees, supplementing the interview and formal referencing process. Whether cultivating internal talent or seeking external candidates, a well-connected board director can leverage their network to assist the board chair or nomination committee assemble a balanced and effective board team capable of steering the organisation through evolving challenges and opportunities.
Growing and Extending a Board Career:
The importance of a good network will be evident to any newly appointed first-time board director. Reaching out and connecting with people across your network is usually integral to achieving a board position and kicking off a career as an independent director. This process can vary significantly in length, and many who have gone down that path will know that building a relevant network often begins years in advance of getting that first seat. Once you search actively for board opportunities, engaging the network becomes vital to your search strategy and usually demands high-touch interactions.
Many independent directors have chosen to move towards a portfolio board career. Like other phases of a career, this requires a degree of planning and management. Every board opportunity presents unique personal challenges, but given their limited bandwidth, directors must determine which seats will best align with their capabilities and interests. For example, directors may harbour interests in serving on the board of companies across different sectors or markets, orienting to companies of a particular size, scale or maturity, or perhaps preferring public companies over private. Distinct patterns can be identified in the evolution of board careers, with some directors regularly recycling their knowledge, skills and expertise among companies of a similar class and profile. In contrast, others trade up or down in scale and relative complexity. The networks that a director needs to cultivate to achieve such appointments and subsequently leverage in service of the company can vary greatly. So, directors must be intentional about how they propagate such networks.
The value of networks can also be critical in conducting personal due diligence on a company before electing to join its board. For many reasons, directors should take great care in selecting where to serve, and their networks can provide a rich source of intelligence in making these determinations.
In conclusion, building and maintaining a strong network is not just a personal endeavour for board directors; it has far-reaching implications for their effectiveness and performance as a director and an organisation’s governance, as well as their own board career. By cultivating diverse relationships, embracing continuous learning, increasing visibility and influence, and supporting strategic recruitment and succession planning, networking empowers board directors to fulfil their fiduciary duties effectively and drive sustainable value creation for their organisations. In today’s interconnected business landscape, a robust network is an invaluable asset that can elevate a board director’s impact and contribute to long-term organisational success.
