Top ten tips by Sharon Constancon

EQ and PQ

EQ – better described as “social intelligence”, needs to be fully engaged (or learned and engaged) to be an effective NED. You need to read the language of the Boardroom, the organisation and the Chairman and without compromising your challenge, work out the best way to “land” your knowledge, challenge and input. Body language; what is not said; and choice of words are all critical in understanding the true meaning and concerns of a director.
Story: The NED who frames their questions to divert defensiveness is far more likely to get a desired assurance than the director whose style is accusatory. A NED who notices a CEO or Executive’s push-back on a subject and then offline has a constructive and supportive conversation will bring huge value.

PQ – personal agendas (politics with small “p”) have no place in the Boardroom – all actions and decisions should be taken only in the best interest of the organisation.
Story: An Audit Committee Chairman playing to his personal agenda to retain the role when clearly he had “gone native” and was not thinking independently and in the best interests of the organisation.

IQ and skills, knowledge and experience

A common observation is that NEDs are not fully utilised for the skills and knowledge that they have. Chairmen will often pigeon-hole a NED to a given topic and not recognise other input and capabilities. It is important as a NED to recognise when it happens and work with the relevant executives and Chairman to transition the mindset. This is done through earning respect, not beating the drum.
Story: A Chairman who did not grasp that a NED had both governance and financial skills, therefore failing to treat challenge in the latter with respect.

Balance contribution with listening

A NED with an opinion on everything is not respected by their peers. Less is more. Think before you speak and ensure you listen to the contribution of others and build on the conversation.
Story: A NED who always answered questions posed by other NEDs even though 90% were directed to the CEO, FD or management.

Noses In, Fingers Out

A NED must be visible, knowledgeable, use intuition but yet not cross the executive boundary line. Your role is more one of influence, challenge and support, not of decision making.
Story: A NED of a holding company board, as a NED on the subsidiary board, very competently mentored and coached the CEO, transitioned the messages and supported the Board gaining better understanding of the business and its risks.

Board Pack – monthly focus

Board papers can become lengthy, repetitive and purely a dump of responsibility. First challenge may be to support the Chairman and CoSec to improve the quality of the papers and second is to create your own focus within which to read the papers, to ensure you get the most out of the information. This allows you to think laterally and differently and protect against becoming stale and just accepting what is provided
Story: One month you might put on a pair of governance glasses, consider a risk focus or a financial focus. This way, over a period of a full year, your contribution is varied but focused, professional and most importantly – valuable.

Nurture relationships

Communication is paramount between you and other board members, you and the executive and you and other key stakeholders. A NED role requires engagement, not for 2 calendar days a month but rather often throughout the month, even if that might only be a short discussion.
Story: A buddy system or lead NED system is often used, linking a NED to a vertical business area or person in the business, to focus on the knowledge, support and communication of information. This informal relationship can create an acceptable channel of two-way conversation. The NED needs to be mindful of not overstepping in the involvement.

Adapt tone and style

Every Board is unique. From one Board to another you will probably need to be a bit of a chameleon, to ensure you use the language, tone and style of the board. Where this tone and style is appropriate this is an easier task; when the tone and style is not fully effective, which is very common, it is important to understand it first, work out how to function effectively within its constraints and then finally to work to help the Chairman to make improvements.
Story: A very large financial services firm where the style was not to challenge, to politely rubber stamp excellent governance but not to add value to the organisation. A board evaluation highlighted this to the team and the Chairman and provided a roadmap of practical changes to become constructively engaged and adding real value.

Beware hobby horses

Avoid having a hobby horse topic that you pursue at every meeting; a better way if you are concerned about something is to work out the internal champion and then work directly with that person or department and feed the progress back to the CEO and the Board. It is important to be able to focus on all topics and bring common sense to discussions, even if you are not an expert.
Story: A NED harping on about the “customer experience” at every board meeting but never engaging with any executive to determine what might be in progress in this regard. Rather add insight into why this might be important and how this could be woven and embedded into business behaviour.

Deep dive involvement

A “deep dive” may be needed, particularly in times of challenge to the business. When signing up for the role, you have to ensure you can deliver when there is a crisis. This can be challenging for busy executives. Once the crisis is passed, the deep dive ends with a definitive step back into the NED role, taking the value of added knowledge but clearly staying on the right side of the fence.
Story: A Chairman who has to take on an interim CEO role and then step back into his non executive role, or so he thinks. The challenge is then the relationship between the new CEO and Chairman and quite often leads to a shortened tenure for the Chairman, as the step back is difficult to handle well.

Supporting the Chair

The Chairman is the leader of the Board and should set the tone, culture and focus of the Board. Given this, it is a lonely place and the relationship with the CEO and organisation needs to be supportive. The NEDs and SID can offer direct support to the Chairman in this respect.
Story: A very overpowering Chairman was supported by a SID with far stronger EQ skills and a very competent and balanced CoSec. Together they were able to support the Chairman to chair the Board more effectively, ensuring his own behaviour and agenda were appropriate.

Sharon’s bio.

Sharon is the CEO of Genius Methods – a company that offers tailored robust, behaviour-focused board evaluation services to many industries, listed entities, regulated businesses, e.g. financial services, NHS, charities and Housing Trusts, family businesses, institutions and SME’s.

Sharon’s experience in risk management at the Board level of more than 250 global companies along with her knowledge of regulations, international finance, corporate governance and financial markets have provided her with the ability to work with Boards at many levels – strategic, risk, treasury, governance, behavioural and leadership. This first-hand experience enables Sharon to support Chairmen, CEOs, NEDs, CoSecs and FDs in their mission to improve the leadership, challenge, risk management and effectiveness of their Boards.

Sharon’s career has included roles as Company Secretary at JCI (Anglo American), Treasury Manager for Blue Circle and Chief foreign exchange dealer for Société Générale before starting her own businesses, the first of which was listed on the Johannesburg Stock Exchange in 1997.

Sharon is a Chartered Director Fellow of the Institute of Directors, a Chartered Secretary and Fellow of ICSA; she holds an MBA from the University of the Witwatersrand, and has been awarded a number of business awards.

Sharon served as Non-Executive Director of Buckinghamshire Building Society during the time of transition to twin peaks regulatory control and support the organisation in their relationships with the PRA and FCA. As Chairman of the Conduct Committee she led the transition to the customer experience culture required in the industry. Sharon is currently on the Board of the South African Chamber of Commerce, UK Chapter and Caban Capital plc. She has also served on a number of Boards and Committees of the IoD and Governance, Risk and Company Secretarial Steering Panels.

Sharon provides practical mentoring to Executives and Directors supporting executives in their day job and Directors and Chairmen to be their best as members of the Board team.

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