During the course of succession planning, nominating and governance committees are on the lookout for the types of skills, abilities and traits in candidates that they need to fill their vacancies. In most cases, they're aware of the growing pressures and expectations of board directors. The change in the expectations for board directors calls for a new outlook on board performance. Current and future boards will be the ones that set a new standard and pace for the modern board director.
As companies approach board refreshment, it's important for them to be keenly aware of the trends and issues facing today's boards, which means they need to transition from present-day thinking to being forward-thinking. In looking toward a successful future, modern boards will benefit by seeking the following five traits in new board directors — curiosity, information-seeking, an investigative spirit, a disruptive/outside-the-box mindset and awareness.
The Curious Director & Meeting the Challenges of Modern Governance
- Modern Board Directors Are Curious
Musk makes a valid point. One of the pertinent questions that board succession planning committees should be asking board candidates relates to their willingness to develop skills around curiosity and asking the right questions. Curious board directors are hungry for knowledge and education. They consume information continually. They encourage a positive culture of curiosity instead of perceiving it as incompetence in their peers. Modern boardrooms discourage the concept of telling board directors what they should know and welcome compelling questions in the boardroom.
- Modern Board Directors Are Informed
On the whole, what formal programs lack is that they weigh heavier on providing knowledge and information and don't include skill-building exercises in how to ask the right questions to get answers that are insightful and informative. The result is that these programs provide little useful value.
Most of the information that boards get comes to them secondhand. Independent board directors don't always know enough about internal processes and operations, other than what management offers to them. As a result, they're largely dependent on management for the type of issues they're in charge of overseeing. By contrast, executive directors often lack expertise about the latest trends and news in the marketplace. Modern board directors need to take the time to challenge senior executives before they can contribute meaningful independent business judgment. Independent directors and executive directors need to be asking each other questions that supply answers to their own knowledge base.
In essence, modern board directors are on duty 24/7 and they keep up with perspectives stemming from investors, customers and the media.
- Modern Board Directors Are Investigative
Modern board directors can't pass up a highlight without digging past the headlines to gain a better understanding of trends and current issues. It's only by objectively evaluating and questioning what's going on in the marketplace that boards will be able to identify and overcome obstacles. Modern boards must be highly innovative and resourceful, exploring past the obvious to achieve the best practices and outcomes.
To be competitive, modern board directors need to digest new information and determine how to apply it to their company. In addition to assessing external information, modern boards need to be looking at potential responses by asking what they can do better as individual board directors and as a whole board.
- Modern Board Directors Are Disruptive
Modern governance sets a new course for board directors. Modern board directors who are disruptive are forward-looking and thinking. They're looking for connections and insights in unexpected places. Modern board directors are eager to hear from agitators and disgruntled employees because it may give them information about how to shake things up in a way that produces thoughts and ideas that haven't yet been brought to the top for consideration.
Disruptive board directors are thinking more about how they can disrupt the marketplace to position themselves ahead as well as how competitors could disrupt their strategic planning. Jane Stevenson, vice chair of Korn Ferry's Board and CEO Services, encourages board directors to look at the phase of new ideas to assess whether they're at "an egg, chick, or hen stage" and make sure to keep new ideas confidential.
- Modern Board Directors Are Aware
Modern board directors are obsessive about information security and make preventing data breaches a high priority. Awareness in today's corporate world requires factoring in diverse perspectives and being nimble in thinking.