Posted almost 6 years ago by Elisa Nardi

HR in the Boardroom: Getting HR on Board

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​Ahead of our upcoming event, HR in the Boardroom, we have a number of guest posts by our keynote speaker Elisa Nardi, former Chief People & Services Officer at Virgin Media. This week Elisa introduces us to the idea of Board and Human Resource collaboration.

The Board

In a private equity, publicity quoted or a family business, the board are the elected group who oversee activity in your company and have the highest powers and authority in the management chain.

Their key concern is for CEO performance, strategy, financial discipline and good governance. Perhaps as a Human Resource professional your contact with the Board is limited?  Perhaps you are the Group HR Director or Head of Reward and interact with the Board in regard to remuneration matters. Perhaps you are building your HR career and are intrigued as to what really goes on at Board level?

Whatever the case, I believe that there are a hundred reasons to build a strong relationship with your Board – even if it at first, you’re not entirely invited!

The first question to consider is what subjects are Boards interested in and in this vast array of possibilities, which ones need the expertise of an HR professional? The answer is both obvious and rather less transparent.

Activities that need HR support

Remuneration is an obvious area, as a prime responsibility of the Board [and the Remuneration Sub-committee] is to set salaries and compensation for company management. The depth of your relationship on RemCo can however vary, as there are multiple players to consider – not least the Chair and Committee members, but also independent advisors, assessors, specialists and for publicly listed Boards, shareholders.  The range of topics in the reward space is equally vast and could cover anything from setting the salary of a senior executive, to designing a long-term incentive plan, to reviewing changes in tax laws and their implications. Good judgment has always been essential in this arena as you are often working on behalf of both the CEO and your Board.  But we’ll talk more about skills and character traits on another blog. In what other subjects might a Board look for HR support?

Succession management is probably the next one that automatically springs to mind. Boards are responsible [often through the Nominations Committee] for selecting and appointing key positions on the Company Executive [the CEO and CFO for example], as well as making recommendations on the appointment of other Board members. A well run Board will go further than this, delving deep into the organisation to understand where its future pipeline of senior executives are coming from or taking an active interest in the diversity and inclusion of the management population. Some Boards will even act as mentors to more junior executives with high potential, imparting wisdom and knowledge and perhaps learning something along the way!

The HR team can be a powerful ally to the Board in this arena, often with deep insight and knowledge of talent and succession concerns or opportunities. A good Group HRD or Talent and Succession leader will build relationships and provide information that piques the curiosity of the Board – getting them hungry for insightful data, thoughtful propositions and creative ideas. Understanding the recruitment market in your sector for key roles like the CEO, CFO or COO is of paramount importance. Finding a way to support your Board and Nominations Committee [a place you are not necessarily naturally invited] is important – even if you offer, as I once did, to take the minutes!  It’s remarkable how many times people will ask for your opinion if you are physically present in the room!  Influencing your CEO and the Board Chair to take an active interest in Board and wider company succession and talent management is a vital part of your role as an HR professional.

Leadership, Culture and Organisational Engagement

Many Boards are starting to show a keen interest in Leadership and Culture, realising the importance of leadership style [particularly of the Group Executive]. Emotional intelligence, cultural sensitivity, social and political intelligence are arenas of much greater interest than ever before, as Boards begin to correlate great leadership with great customer experience and therefore better financial results and happy shareholders. Convincing your CEO of the need to review these points in combination is an important way of showing how commercially in-tune you are with the dynamics of the business. Why can’t the Group HRD present the facts that show the link between people engagement, customer satisfaction and financial success? Alternatively, be present, collaborate with the CFO and COO and present the data together.

CSR

And when we think about culture, corporate social responsibility is an area of interest for Boards and HR professionals alike [even if someone else has the ‘A’ accountability for what gets delivered].  Partnership is your greatest ally – working with your Legal team for example, when often your General Counsel or Head of Legal sits in on all Board matters.  Engaging your Board in discussing the ‘purpose’ of your business – what it is really there for, what is its social purpose, is a fascinating subject, although not always one that is an easy conversation starter.  Working with the Audit Committee is often a place of entry for the subject, allowing for a wider conversation in time.

Change Management

If your business is going through a significant period of change [downsizing, restructuring, up scaling for growth] then there is a key opportunity to build a relationship with the Board through your role in the change process. This might include bringing ideas or insight to the Board on organisational design, operating models, process re-engineering, global employee relations, key hiring programmes or dealing with regulatory or government issues.

Understanding the impacts of change particularly externally and reputationally will help you forge a powerful relationship with your Board.

And let us not forget that HR professionals have a key role to play in helping shape the future strategy of the organisation, along with how things get delivered. Most organisations have people embedded at their heart – people power the company through customer interactions, through the design of great products, through the improvement of processes or the delivery of service. Understanding and managing people are things that most managers and leaders think they are naturally good at, right? HR professionals bring a different experience and expertise to the table – insights, knowledge, competence and deep understanding of people practice. Combine this with an acute understanding of what must commercially be delivered and you have a powerful skillet to offer.

Next week Elisa talks about her views on the top character traits, skills and intelligence needed to work effectively with Boards – on them, or advising them!