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HR's Role Must Be Expanded in the Boardroom

March 4, 2001
No one can ignore the trend of organizations willing to outsource a good partof what was traditionally within the HR department's domain.

    Health and welfare benefit administration, payroll and EAPs are commonlymanaged outside of the company. And, many organizations have delegated employeerelations, interviewing and hiring, compensation design and retention programsto department managers' responsibilities.

    HR professionals may never be able to shed the label many of us have foughthard to cast off: administrators.

    Knowledge is power. And so is networking with the right people. To grow, theHR professional will need to work on both.

    So how do we become an indispensable resource in the organization? The answeris to look upstairs in your company, not downstairs. An HR presence is lackingin the most fundamental of all business rooms - the Boardroom. And anexperienced HR skill set can, indeed, make a contribution there. You can addvalue to your company while broadening your perspective with a new, moreinfluential and strategic role.

    On a primal level, HR expertise is helpful to the Board when large-scaledecisions can affect the workforce - or vice versa. There are fiscal and legalcorporate responsibilities that cannot be left unattended. Then, there is thecapable involvement and expertise that HR professionals can bring towards thecomposition and recruitment of Board members. Finally, there are the expandedskill sets your own senior executives can mature with placement onto outsideBoards.

    With the right training you will be the only one in the organization with theexperience, sensitivity and knowledge. But how can you gain that experience? Ittakes time, but there is an effective development path.

    When you're about ready to start, get buy-in from your company. Typically,it's a welcomed request, because it reveals to the company that you're not onlyinterested in issues solely relating to HR, but to the success of the companyand the CEO as well. If you report to the CEO, a perfect time to chart out aplan is during your performance review. The initiative will reinforce yourdesire to become more educated in scope. It will also open the doors forfinancial assistance, such as association memberships.

Do your homework
    First, it's important to learn the fundamentals of a Board. Pick up BoardroomBasics: A Pocket Guide for Directors, by Roger H. Ford, Ph.D. It's a greatreference for those who need to understand what a Board is. Beyond defining aBoard, it also differentiates the various kinds of Boards; for example,illustrating family, non-profit, advisory, private, and public boards (one ofthe significant distinctions is corporate liability exposure).

    That leads us to understanding the roles and responsibilities of a Boardmember. There is a small, but very helpful book, Your Roles and Responsibilitiesas a Board Member, by John Carver and Miriam Mayhew Carver, which clearlydelineates what is expected from Board members and how a Board acts. Thepublication provides many of the basics: job descriptions, how to approach yourrole as a Board member, and defining hands on versus hands off Boards.

    It teaches Board governance and defines the various committees that exist,such as audit and governance. Most important, it enlightens the reader with thesense that the Board does not exist for each director's personal hidden agendas;with membership comes the global and fiscal responsibilities of theorganization.

    Next, take a more active understanding of how your company's Board works. Isit an active or passive Board? Who serves on your Board? What are each person'scredentials? What makes him/her valuable? What skill set does each member bring(i.e., legal, accounting, global policy, marketing)?

    Next, determine the dynamics within your Board. What is each person'spersonality profile? How does each member work with each other? Or, in somecases, you may have to find the source of conflict. Unfortunately, some Boardscan be divided to the point that passive aggressive behavior is frequentlyencountered.

Get involved
    A great way to actively learn about Boards is to become a member of theNational Association for Corporate Directors. TheNACD is a non-profit organization dedicated to enhancing the governance andperformance of business entities. Founded in 1977, it is an authoritative voiceand vital forum on matters of policy and practice. NACD promotes highprofessional board standards, creates forums for peer interaction, enhancesdirector effectiveness, asserts the policy interests of directors, conductsresearch, and educates boards and directors concerning traditional andcutting-edge issues.

    Now, become a Board member. It's easier than you think if you broaden yourperspective. There are many non-profit organizations that could use yourexpertise. Investigate opportunities to join the Board of your local hospital,humane society or housing organization. Even your PTA has a structure thatfollows basic Board procedure and behavior. And they could all use yourexperience in HR management.

    With this newfound expertise, now would be the time to return to the CEO toask to become an observer at your organization's Board meetings. Odds are, therewill be many meetings where advice on topics that relate to HR strategic issueswill be needed and solicited. Make sure you do your homework before eachmeeting. Know the agenda and develop notes to help you refer to HR issues as youare asked.

Share your expertise
    Strategically, your role will take on greater purpose in two ways: helping toassess Board needs, ultimately leading to an intimate involvement in the searchfor new directors; and by developing a Board Education and Training Program forsenior management.

    Experienced HR executives are singularly capable of understanding theircompany's cultures and skill requirements. If you have done your homework, noone outside your company will know more about your Board make-up than you.

    When there is a vacancy, your Board will approach you - not an outsideorganization - for advice on how to fill that seat. You will be sought forcounsel about how to balance and structure your Board, how to shape Boardcompensation - even how to provide Board development programs. You can be awonderful asset in the recruitment process for a new Board member.

    In addition, many senior executives benefit from serving on Boards ofcompanies in non-competing business sectors. Those executives who are focused onone corporate function will be enriched most from exposure to general managementissues. Those who have had long-service careers in one company will also benefitfrom an external perspective, helping to build strategic agility for actionduring turbulent times.

    A Board Education and Training program helps executives think like Boardmembers. They take on a greater appreciation for the corporate good. Exposure toBoard members provides visibility and opportunities to watch behavior models.And, executives usually gain broader perspectives, competencies in other areas,and greater confidence in problem solving skills.

    If you are unsure of how to implement a Board Education program in yourcompany, there are many competent outside advisors who can help. They usuallyconcentrate on two or three executives, building skills, networking withextraordinarily competent Board members, introducing them to appropriate CEOsand search consultants, and placing their names on appropriate Board TalentBanks of targeted, relevant, companies.

    What is the end benefit of all this work? If you do this job well, CEOs willeventually move from asking about insurance plans, to appealing for a Boardseat, to asking, "let me run some ideas by you."

    It takes a lot of work and research, but the end result is a strategiccorporate role that cannot be replaced - an enabler with a sense of the pulse ofthe senior management team, as well as the Board and the company itself. Youwill have earned it.