The boardroom is for bores – HR needs to be on the exec committee

Soon it will be springtime, and every HR professional will be bombarded with conferences, articles and general wailing about how few HR directors are on company boards.

This is one of the most misguided, misdirected and boring topics on the HR landscape, advocated by people who have obviously never been to a board meeting.

Now I accept there may be people for whom 10 or 12 boring meetings a year are a turn-on. But sorry, not me. I attend more than enough of them as it is.

It also seems to me that these advocates crucially misunderstand the nature of organisational power.

While boards do have power and authority, it is of a fundamentally different kind to that exercised by chief executives and their executive committees.

The day-to-day running of a business rests with the chief executive’s team. The board oversees this, approves strategic decisions and represents shareholders’ interests, but it’s not where the action is.

Nor does it simply follow that because HR is on the board, the organisation takes HR and people issues seriously. I see no evidence for this, nor any indication that companies with HR on the board achieve better business results or higher employee engagement or, indeed, better anything.

So what is important? There are two things that are crucial.

First, HR should report to the CEO and not to the operations director, chief operating officer or the finance director. That’s the first test of the organisation’s view of HR. Reporting to the CEO puts HR on the same footing as the other functions and, I hope, a notch above a few. Reporting to the business head is essential if you want to be taken seriously and be in a position to influence the organisation.

Second, you must be on the executive committee – the highest decision-making body of executive management. This is really where the action is. It is here that policy, projects and strategies are discussed and decided. Membership of this group allows you to put HR issues on the agenda and show where HR can help with implementing business issues.

With these two things in place, you are exactly where you need to be in terms of structure. Board membership becomes irrelevant and the issue changes from where you are positioned, to what you actually do and how you do it.

Even with a seat on the exec committee and reporting to the CEO, HR can still be ineffective and irrelevant to the organisation.

Formal organisational power is not enough in itself. It’s your ability to exploit it that’s the key, and this highlights the most vital skill for any senior HR player: the ability to influence people at the most senior level of the organisation.

To be truly effective in the long term, you need position and the ability to influence.

The boardroom debate deflects us from the real issues: getting HR reporting to the CEO and on the executive committee; and how HR people acquire the skills and abilities to exploit this position. Solving these issues will drive us forward and make a difference to our organisations.
So let’s launch a campaign to free downtrodden HR directors from the clutches of operations directors and deputy CEOs. While we are at it, let’s look at how we can develop the HR community to take advantage of its new status.

Then I can continue to avoid attending more uninteresting meetings while doing the right thing by influencing my CEO and other executive colleagues, and helping Royal Bank of Scotland make money.

Being on the board? No thanks.

Neil Roden, group director human resources, Royal Bank of Scotland

Comments are closed.