Aboard process that is far overdue for change in many companies is onboarding, which is increasingly critical today to the effective functioning of both the overall board and its individual directors.
Some companies have very formal onboarding processes for directors, others informal programs, and some practice on-the-job training. Historically, many boards have focused more on orienting new C-level officers rather than ensuring that their new board members are armed with the information needed to hit the ground running.
Companies are becoming increasingly aware that their onboarding processes need to address the challenges of today's board service, the changing nature of the boardroom, and the competitive realities facing organizations and industries in an ever-changing global market.
Driving the need for a reprioritization of the onboarding process are a number of factors:
* The gap between stakeholder demand and what boards can deliver.
Each year, we see stakeholder demands of boards growing--for more oversight, more engagement and more involvement in setting strategy. Investors want boards to not miss a beat, even during times of director turnover. Yet 60% of directors see a gap between the expectations placed on boards and the reality of a board's ability to oversee a company, according to the Global Board of Directors Survey from WomenCorporateDirectors, Spencer Stuart and Harvard researchers.
* Board size and CEO involvement. Because boards are smaller than in the past, it is even more important that each board member is up to speed and that the full board comes to each board meeting prepared to make effective decisions impacting the future of the company. The CEO's involvement in the onboarding process is critical, along with contributions from other board members and C-level managers. Consideration of market forces, current and future strategic directions, corporate risk, technology changes and performance all need to be part of the new member orientation process.
* More diversity around the boardroom: As gender, ethnic and age diversity increases on boards, a healthy dose of dissent and complementary skills and backgrounds will be added to board decision-making. Through an effective onboarding process, early in each member's tenure, the opportunities for informal networking--sharing, learning and building trust with other board members and senior management--are increased, thus leading to a more robust and effective...