Joining a board of directors should be taken very seriously
“Coote got me in as a director of something or other. Very good business for me – nothing to do except go down into the City once or twice a year to one of those hotel places – Cannon Street or Liverpool Street – and sit around a table where they have some very nice new blotting paper. Then Coote or some clever Johnny makes a speech simply bristling with figures, but fortunately you needn’t listen to it – and I can tell you, you often get a jolly good lunch out of it.”
AGATHA CHRISTIE, ‘The Seven Dials Mystery’ (1929)
I keep telling readers of Thought Leadership to read novels, not just management books. The humorous excerpt above tells you why. The novels need not even be great works of literature – they just need to be written by authors who are acute observers of human behaviour. Business is all about human relationships, after all, and novelists can often tell you a great deal about why people behave the way they do.
Agatha Christie, the very famous, hugely successful detective novelist, is here poking fun at the institution of board director. In the not-so-distant past, directorships were indeed very much like what she describes. A chairman or CEO would get his buddies into his board, making sure that they were genial old geezers who were not too bright and would generally agree to everything. They needed to know very little about the business in question, and were enticed by the status bestowed on them by the directorship – not to mention the nice lunches.
And that was the nature of many directorships the world over, and in many cases still is. We in Kenya have certainly constructed many a board consisting of characters just like Christie’s narrator – tourists who turn up every three months to see the sights, not thinkers who understand the business and want to improve it.
But all that is changing. Corporate meltdowns have proved that the board of directors is not an institution to be taken lightly – the consequences can be catastrophic. A few years ago we had Enron, Tyco, Worldcom and Marconi; now we have watched the implosions of Lehman, AIG, RBS, Citi and GM, and the same question comes up: “Where was the board of directors”?
The board is best thought of as a fulcrum between owners and managers – but its primary function is not to balance power. It is in essence a decision-making body, one that wields enormous power to make or break the corporation. If your board is talented, intelligent, well-structured and working in an atmosphere of mutual trust and respect, the chances are that it will make good decisions on the whole. If your board consists of sycophants where one or two people rule the roost; if it is riddled with suspicion and mistrust; if directors merely show up rather than participate – then serious problems await you.
Working on a board is a serious business, and should be taken very seriously. In America these days, the time spent on a single board comes to more than 20 hours per month on average: spent in formal and informal meetings, committees, reading board papers and generally keeping abreast of what’s going on in the industry. Therefore, no one can really afford to be on too many boards: indeed, more than 80 per cent of American directors these days are on just one board. The norm was more like four or five just a few years ago.
People of accomplishment will always be asked to join boards, but they should be circumspect. Exactly what are you letting yourself in for? Are you joining a board that values talent and encourages challenge, and that cultivates respect and trust? Or one where your value is minimal and your role ceremonial?