Five Steps To Improve New Director Performance and Impact
Jack "Rusty" O'Kelley III, Susanne Suhonen
Corporate Board Member published a bylined article, “Five Steps To Improve New Director Performance and Impact,” authored by Russell Reynolds Associates Consultant Jack "Rusty" O'Kelley III and Global Knowledge Leader Susanne Suhonen. The article provides five steps for improving new director performance and impact. The article is excerpted below.
Boards are increasingly seeking to diversify their membership and draw on a wider variety director expertise. Consequently, they find themselves with an exceptional number of new—and often first-time—directors. While the need to acclimate a new director may occur only sporadically, getting it right can be essential to the effectiveness of a board and impact of new directors.
In response to numerous inquiries from corporate boards, we recently researched director onboarding practices across Fortune 500 companies. With responses from more than 160 directors representing over 100 Fortune 500 companies, our research shows that many boards are not investing heavily enough in integrating new directors. Few companies tailor their onboarding process sufficiently, despite the wide range of experiences and tenures new directors bring.
We recommend five steps for improving new director performance and impact:
1. Personalize the experience
Our survey found that despite the diversity of backgrounds, nearly 60 percent of directors received a standardized onboarding process. Fewer than a quarter of new directors had a customized onboarding process and—most surprisingly—almost a fifth had no formal onboarding at all. Boards need to accelerate new directors’ performance by investing more heavily in customized onboarding experiences and processes. We recommend a process with a standardized core and modular add-ons that can meet the specific needs of different directors based on their unique experiences. We also suggest spreading out the modules over six to nine months to allow the knowledge to grow in context.
2. Create a board-led process
According to our survey, the board secretary is most likely to lead onboarding programs, running the process for 44 percent of new directors. Independent chairs and lead directors rarely have such a prominent role. Effective director onboarding points to reversing these numbers: The independent chair, lead director or chair of the nominating and governance committee should own the onboarding process, with support from the board secretary. Board leaders can provide greater context and nuance around the board culture and business strategy. And while board leaders face greater responsibilities, we see a role for every director to play in integrating new directors.
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