The value-added director.

• Author: Black, Lennox K.
• Position: Corporate director

Having the right directors, who bring the right chemistry to the board, is more important than ever to help a company achieve its potential.

Boards of directors can be compared with basketball or baseball teams. The team might have a collection of high profile, extremely well-paid players and still not win the title. Or, it may have a group of lesser-known but solid performers with a strong desire to excel who recognize the role each plays and the strengths each brings to create team victories.

Many of the most effective boards today are made up of people who are essentially careful listeners and astute thinkers. Through their careers, they may have had many accomplishments, but have not been in the spotlight. In meetings, they pick their moment to make their point, and when they do, management listens, because it respects their views. This describes the value-added director.

Smart corporate managers recognize the important contributions a board can make and structure their board to maximize its effectiveness. To have a valuable board today is probably more important than it has ever been, in the face of such issues as intense global competition, demanding and cost conscious customers, and pressure from investors to constantly better performance, no matter how good earnings are. It is hard to imagine there has ever been a time when business was more complex.

Thoughtful managements are blending the many new ideas on board practice and composition with effective traditions. In the rush to apply new ideas, a company should not overreact to the loud voices, especially those who may be placing self interest above the long-term health of the company. The value-added board today is combining new thinking and proven practice.

How these "new boards" take shape will depend in large measure on the particular needs of the company. For example, boards of cyclical companies will bring skills and experience needed to understand how to erect barriers to minimize or counter the down periods. Boards will be customized to help companies expanding internationally, and those dealing with industry uncertainty. Companies in early stages of their business life need different guidance than more mature and essentially institutionalized companies.

To improve board effectiveness, it is important to recognize and appreciate the realities of the various dynamics at work, to move quickly in making necessary changes to sustain or restore growth, and to make sure certain strengths built over time are maintained and continue to be grown.

Two critical qualities of a board are the "chemistry" among its members, and the experience of each director - experience both in business and in life. Being a good director involves more than having business talents and specialized knowledge. These are...