Being Effective on the Board of Directors

You have just been elected, selected, volunteered, appointed or maybe you were a name in a legal formation document, but now you are a member of a Board of Directors. Visions of movies with powerful board scenes such as “Margin Call”, “The Iron Lady”, and “the Sum of All Fears” dance through your head. A $5,000 suit or $10,000 Carolina Herrera dress, gold cuff links or diamond ear rings, Louis Vuitton $10,000 shoes and a Christian Lacroix $2,000 tie are sure to come soon.

You envision walking along and having everyone stop and look at you with envy and wish a pearl of wisdom would fall from your lips during their presence. Giving orders to lowly underlings and have them run to execute them makes you shiver with power.

I hope that you get that out of your system quickly, because until you do, you will be ineffective. The longer you hang on to even part of one of those fantasies, the more the rest of the board will hate you. Let’s get down to reality.

Being a good board member is hard work. Regardless of whether the board is the local homeowners association or a fortune 500 company, there are common traits of being a good board member.

First let’s get rid of the notion that you need to be an expert in the field the board oversees. While industry experience may be helpful, most of the technical aspects of what you need to know can be learned. In fact those “dumb questions” you want to ask may be questions other board members have secretly wished they could voice.

And by the way, I’m not suggesting you leap in straight away and start showing all your dumb question cards. A dumb question is a rare card to play and like any card, must be played at the right time, or it, and you, will be the loser.

You should be asking “Who is this joker (me) and why should I listen to him?” I have: created boards, been on startup boards, been on “shutdown” boards, been on very large company boards, been on “problem or toxic” boards, been on highly effective boards, been on profit and not-for-profit boards, public and private boards, large and small boards, domestic and foreign boards.

I am regularly asked to be on boards and I choose very carefully. So to answer the question, I’m the guy that has lots of direct board experience. That’s why you may want to pay attention.

The board environment. You should have a strong interest in the sector the board controls. Be curious about it. Want to explore. Have a desire to learn about the sector.

What frames the others that are successful in this area? Show passion and inquisitiveness. Don’t be afraid to dive deeply into an area that you are either interested in or feel there is an opportunity (but don’t meddle).

Get to know your fellow board members outside of the board room. Your listening skills inside and outside the boardroom must be excellent. The more you know about what motivates them, the better you will understand how to factor in the complex interpersonal dynamics when you need to.

Your self-control will be important. More than one board member has failed due to a focus on “I”.

The same goes for the executive team (if there is one). The president or general manager works for the board (not you). Get to know them, but beware of giving orders one-on-one. That is “pushing your weight around” and is not appreciated. Give advice carefully unless you have been given that latitude by the board through their action.

You are “on stage” at board meetings.  Everything you do, say and don’t say, your body language, your demeanor, all reflect on you. Of course you should be prepared, but using a calm, measured, supportive attitude will gain you respect. Leave boardroom drama for the movies. 

Picture yourself like the pilot of an airplane during an in-flight problem. Cool. Calm. Collected.  A very few precise words, yet communicative. Focused. Looking at the information you have and making decisions based on it.  That is a good board member.

Strive to make your words count.  A few well-thought-out, calmly presented, properly timed words will almost always have more impact than a long-winded essay.  When you are new to a board, my advice would be to listen more and talk less.  As you become more comfortable how the board functions, you can be more vocal.

Educate yourself on the technical aspects of being on a board. There are numerous online resources and many organizations offer classes for new board members.  Always be learning. 

It is imperative that you understand the legal aspects of your board, what you can and cannot do, and how the board must be operated.  You will subject yourself and possibly others on the board to legal consequences if you do not follow the rules of law. Plus, certain actions you take as a board may be invalidated if not handled in the proper way. 

Be fully aware that if your board has Directors and Officers insurance, it most likely will not apply to situations taken outside the prescribed legal bounds. 

Not-for-profit boards usually have state laws that govern many aspects of how they operate. Open meetings and quorum laws and other statutes must be fully understood and complied with. The simple act of going to lunch with two other board members and discussing board business can be illegal and get you into trouble.  Be a resource to your board and fully understand these laws.

All of these help demonstrate your commitment to the board.  Learning will also help you be innovative, which is a key element of a top-performing board.  They must “think outside the box” regularly not only to challenge the status quo, but to examine new alternatives and opportunities.  Be innovative.

The hardest part of being a board member for most people is thinking strategically.  Some boards such as those charged with running buildings, managing apartments, or homeowners associations, may find themselves constantly drawn into and immersed in details.  They should find ways of elevating their contributions above these details and focus on the “governing” aspect of being a board and delegate the “managing” to another body. 

Thinking strategically involves

• placing yourself out in the future,
• visualizing that better future (usually several flavors of that future), 
• looking back,
• creating innovative scenarios of what to do to achieve that future vision, and then
• being able to convince and motivate others to help you frame and refine these strategic challenges and opportunities to make it happen.

It is hard to keep in a strategic frame of mind.  It will be impossible to get there unless you become adept at zeroing in on how to ask very powerful and insightful questions. 

Being a member of a board of directors can be extremely rewarding in many different ways, most of them invisible to everyone but you.  If you do your job with the effort and mental preparedness that it deserves, you will be rewarded many times over.

Good luck with your board.