Context is Critical for Board Appointments

For more granular insights into what makes boards successful, the NGS team interviewed more than 20 leading board chairs and CEOs in one major industry area.

Effective board chairs attract good board members

Interviewees emphasised the pivotal role of the board chair and claimed that an effective chair attracts good board members. The chair shapes the nature of discourse and direction, sets the tone, clarifies the scope and expectations of board members, and has the key role in the relationship between the board and CEO. Effective chairs create space for robust debate, keeping their ego in check, and, in the words of one experienced chair: “We need to be able to chair in a forensic and robust way.”

Context is key

For board members, the context and relevance they bring to their roles, no matter what their functional expertise, is key. How knowledgeable are they about the business, the market dynamics, and the broader environment of the organisation? What is the nature of the experience that has given them this context and commitment?

“As board members none of us operate in a vacuum,” explains Broadbent.  “Do we have the business, professional and, perhaps, political maturity to situate the business in its ecosystem? Did we bring a deep understanding of the industry, or work at gaining that very quickly?”

Context + Character + Capabilities matter

In the context of COVID-19, most boards are meeting more often, being more agile than previously in making decisions, and working closely with their CEOs, often in circumstances of extreme pressure on the executive and staff.

“The board’s ability to make the right decisions in a timely manner is greatly impacted by the ‘collaborative gene pool’ of the those around the board table”, says Lelliott. “Building trust and contributing as a team player has never been more evident or necessary”

Mark Lelliott, NGS Global regional chair, explains: “NGS have led and supported a range of board appointments and reviews over the last five years. The elements we look for are: the attributes of the chair, the context and relevance board members bring, and the extent to which the board is managing succession over time – for both the CEO and the board chair”

The fundamentals in board appointments are context and character – and then capabilities,” says Dr Marianne Broadbent FAICD, a managing partner of leadership advisory and search firm NGS Global.

Board chairs and CEOs identified seven character attributes as the foundation of productive board member behaviours –openness and transparency, collaborative working, the ability to listen and take in other views, capacity and willingness to challenge respectfully, good communication skills, emotional maturity, and high integrity and ethical standards.

These seven attributes sit alongside other foundational attributes, such as financial and governance literacy, that provide the basis for identification of potential board candidates with specific experience or functional expertise. All three elements matter: context, character and capabilities.

 

The board chair and CEO relationship and succession

Managing CEO succession is now rightly seen as a critical, if not the most critical, responsibility of the board. But board chair succession seems less embedded in board practice. As Broadbent explains:“The perspective of both our interviewees and our own experience is that we have a considerable way to go with timely and considered chair succession as pervasive and the norm, rather than as a standout characteristic of great board practice”.

 

The Special Report 12 ExemplaryPractices for Creative Industries Boards is available here

Mark Lelliott and Dr Marianne Broadbent FAICD are managing partners of NGS Global, and founding partners of Arbiter Leadership Technologies. They can be contacted at mark.lelliott@ngs-global.com or marianne.broadbent@ngs-global.com  

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