Do we have the right talent to fulfil our strategy?

It’s a question boards need to ask themselves to ensure that management walks the talk on performance, culture and values.

As businesses face the ongoing challenges brought about by inflation and a looming global recession, the importance of maintaining high performance, a strong culture and talent pipeline has become increasingly important for boards. In January last year, data from a PwC pulse survey found 48% of C-suite executives had identified talent acquisition and retention as the biggest concern facing their organisations. 

Traditionally, the role of the board where talent is concerned was predominantly looking at succession planning, however, today we are seeing a shift where greater focus is applied to strategic talent acquisition to support business change, calling boards to ask questions such as;

• If we implement transformative business changes, do we have access to the critical skills needed to drive them? 
• What is the health of the leadership pipeline, not only in terms of succession plans for the leadership team but for other critical roles?

For boards that need new talent, the process of appointing the right person can be challenging. Many boards' difficulties arise from their inability to tap into new talent pools and dedicate sufficient time to narrowing their search down to available candidates. This is often due to a lack of diversity and breadth of experience in their network.

Human capital is incredibly strategic, and attracting, developing, retaining, and deploying the best talent is a real source of competitive advantage. For the board, that involves a delicate balancing act because executing this is the role of management but it is the board’s role to ensure governance. So how can boards attract and hire the best talent and ensure executives are supported in addressing current and future challenges?

Make sure you have a good understanding of the role you're recruiting for 

The recruitment of a new board member is a difficult task.

The fallout of getting it wrong can result in strategic splits, resignations, brand damage, factions, shareholder/stakeholder unrest, etc. However, if the organisation hires wisely, it can reap significant benefits.

Before the process of recruiting a new board member begins, it's essential to have clarity on the needs of the organisation and the capacity in which this new role will help meet those needs and add value. 

One way to understand the skill composition of your board, is to conduct a skills audit. Reviewing board members' skills can help highlight the needs of the company and how to best serve those needs by ensuring that the board is as well-rounded as possible. 

Comparing the skills matrix to the organisation’s strategic plan can assist in identifying where the organisation’s skills gaps are in relation to the organisation's strategic ambitions. This will help refine and focus your candidate selection criteria and subsequent candidate search.

It’s also important to think about how they will work with the business and add value. Specifically, what value do you expect the newly appointed individual to deliver to the board and the organisation? 

Questions to address should include:

• What do we expect in terms of ROI form this appointment?
• Are we reliant on this person bringing networks and related business opportunities?
• How will they contribute to brand recognition through their reputation or contacts?
• How will they contribute to improving the overall governance?
• Do we expect them to bring industry experience, and if so, which industry?
• How will we measure their success?

It’s also important to consider the structures they’ll need to succeed and how their work and expertise are best applied. 

Be clear about how much time your board wants to devote to finding a new member.

The board can play a powerful role in identifying suitable candidates and deciding which profiles are best suited for the role but with busy agendas and limited time to dedicate to the process, great people can easily slip through the cracks.

Statistically, most organisations recruit new Directors by using personal connections. But is it the best way to find the right board director? 

Boards often have limited reach with personal connections and friends or associates, this narrow talent pool inherently increases the risk of appointing individuals who are more inclined to tolerate a ‘group think’ mentality, thereby limiting the board’s effectiveness and representation of the stakeholders.

Investing in an experienced search partner will mitigate the risk of a search process and free up valuable time, enabling the board to focus on its responsibilities. 

Specialist executive search partners have access to broad networks and talent resources that you would ordinarily not have easy access to. In addition to conducting a rigorous selection process, specialist executive search partners can advise on the composition of the selection and interview panels that need to be established, providing guidelines tailored to the nature of the appointment.

Is your Employer's Value Proposition supporting your efforts

Experienced executives and board members understand that any appointment they take comes with some risk. Financial and legal risks aside, reputational damage can be devastating. For most executives and board members, reputation is everything. Taking on the wrong appointment can be detrimental to their board & executive careers. 

Boards seeking to attract new members must proactively alleviate any potential concerns that your organisation is a risk. It’s critical that the business embody and present its benefits; well-managed, supportive and progressive in making informed and robust governance decisions aligned to strong values and principles. 

During the selection and interview process, boards must be able to articulate the value of the role and the organisation and, if appointed, how candidates can have a genuine impact. 

Discuss the importance of diversity

The benefits of diversity are many. Diversity helps create a better working environment and inclusive culture, which in turn helps generate new ideas. A more innovative culture can help your business grow and thrive in an increasingly competitive market. According to McKinsey & Company, an analysis of companies in the S&P 500 to identify top performers in board diversity – defined as those with the highest percentage of women on their boards as of August 2016 – showed that women occupied at least 33% of board seats among the top 50 companies (up to nearly 60% for the highest percentage).

Some companies have already achieved this goal: Amazon's board has six women out of 14 members; Facebook's board has four women out of 11 members; and Alphabet (Google) has three out of eight directors who are female. 

Diversity is not just about gender but also ethnicity, culture, age and experience. 

Fresh ideas and perspectives can help drive performance at all levels.

When boards are searching for candidates, it's important to remember that not all people with different perspectives are created equal. You want people who have a proven track record of success and will be able to make meaningful contributions without disrupting the team or creating barriers.

Be open-minded about the skills required for success in your role; don't assume that someone needs years of experience before they can succeed on your board (or even at all).

With boardroom vacancies on the incraese, you need to make sure that your executive search agency has the right experience, knowledge and resources to deliver quality candidates.

A good executive search agency will have the experience and networks to help you select the best candidate for your boardroom. They'll know how to find professionals with the right skills, who are a cultural fit for your organisation, as well as be able to identify potential candidates that may not be on your radar but could be suitable for other roles in the business.

ELR Executive has over 20 years of experience finding exceptional leadership talent across the FMCG and Food and Beverage Industries. Contact us today.