It’s the classic vicious circle – people don’t put HR directors on boards, because they don’t have board experience. How can you break through?
Make yourself heard
Shout louder and be clear about your role and its influence. Much of the resistance regarding HR on boards is to do with others’ perceptions of the role as little more than compensation and benefits, and therefore too narrow to justify a board place. Space is at a premium -most boards tend to have just nine to 12 seats, with only two to five executives, the balance being made up of non-executives.
HR has gone through substantial change in the last 10 to 15 years, with many senior HR executives not only responsible for the development and succession of the critical resource of companies – their people – but also for forging a key strategic relationship with the CEO. As a result, the modern HR executive has both insight of, and involvement in, the key strategic development and tactical alignment of their company.
HR executives need to be positive advocates of their increasing contribution. At the very least write a ‘note to self’ that details everything you do on the broader corporate stage, so you can continue to inform both others and yourself about your influence.
You need to contribute more obviously to the broader stage, and that stage is usually the executive committee. CEOs have often made the point to us that they want their HR director to contribute more in general discussion, not just on a one-to-one basis. HR directors tend to think they have insufficient knowledge to contribute or challenge, and that their fellow executives (especially finance and the senior operating directors) know more.
As a former FTSE 100 CFO, I have had 12 years’ experience of executive committees, and while they are daunting and competitive forums to an extent, they are also usually collaborative and positive. People with a sensible point or a good question are listened to, whatever their background.
To beef up your confidence, increase your knowledge and understanding – both of yourself, and the forums within which you operate. While coaching is the answer to the first, experience-led learning and situation-handling advice are critical to the second. Get mentoring help from someone who has operated within the same forum or situation, but ideally from a different angle, to give you a new perspective.
If you are worried about lack of underlying skills, get some specific mentoring around key technical areas. I would suggest looking at subjects such as debt financing, cashflow and covenants; understanding analysts and investors’ views; pension schemes and their financial implications; understanding how key advisers interact with management and the board; and understanding your own company accounts and board governance. One-to-one sessions enable genuine discussion to take place, but larger group sessions are also helpful, and some very good ones are run by the Big Four accounting firms and various business and management schools.
Get non-executive experience
Your board is not the only one you can aspire to. Get experience on other boards as a non-executive. If you have the experience of being on a strong FTSE executive committee with influence on, and experience of, many high level aspects of business, you could well be attractive as a non-executive on a smaller company board.
In particular, the rise of the importance of the remuneration committee and the increasing complexities of executive compensation packages highlight a critical need for specific technical experience in this area in the non-executive community. Smaller companies often do not have fully resourced HR departments but, due to their size or type, may count the development of talent and retention of key executives to be critical. A highly experienced, confident, broadly-based HR executive could be a valuable non-executive to a company outside the FTSE 100.
Other businesses that operate outside the FTSE can also have challenging and interesting boards, such as AIM-listed companies, private-equity supported businesses and so on. Beyond the commercial arena there are non-departmental public bodies such as the Big Lottery Fund, Design Council and VisitBritain; other not-for-profit organisations, as well as pension trustee boards, hospital trusts, and many more. All these can offer invaluable experience of the board environment, allowing a fuller understanding of responsibility, oversight, collaborative approvaland consensual decision-making. They also are good networks. If you prove yourself in a top trust where your chair may also be a director of a plc, then appreciation of your contribution will extend back into your commercial arena.
How to get non-executive board experience
Undertake some specific development. Find a tailored one-to-one programme that introduces you to:
- the corporate theatre – administration and responsibilities
- board basics – structure and balance of power
- corporate governance – framework and implications
- Make sure you know how to identify your competencies as a potential non-executive director
- Understand the appointment process
- Tackle any necessary restructuring of your CV
- Establish which boards might be suitable
- Get assistance in making yourself known to the executive search world
- Remember you cannot be ‘pushed’ onto a board – you have to be ‘pulled’ on by the board itself.
Kathleen O’Donovan is co-founder of Bird & Co Board & Executive Mentoring. Trained as a chartered accountant and previously a partner at Ernst & Young, she was the CFO of a FTSE 100 company at the age of 34. She is currently non-executive director of four public companies, chair of three audit committees and one nomination committee, and a member of three remuneration committees.