ESSENTIALS FOR LEADERS AND THOSE THEY LEAD

Serving on a board of directors is an unequivocal opportunity for leaders to develop new skills, hone their business acumen, and expand their personal and professional networks. And boards themselves benefit from the fresh perspectives that new directors bring to the boardroom. But for those who haven’t taken the plunge, the “how” of joining a corporate board is less than clear. Board membership is also a significant investment of time, especially as the board’s role—and the range of issues that come across a board member’s proverbial desk—continues to expand and evolve. We’ll take a look at specific ways to get started on your board journey and what success looks like once you’re there.

AN IDEA

Ask, don’t tell

While the path to board membership may seem winding or murky, McKinsey senior partner Celia Huber and colleagues outline six steps that board-curious leaders can take. Wherever leaders are on the journey, they shouldn’t underestimate the value of asking questions: an “ask, don’t tell” policy is an important way for directors to contribute and clarify their role. “First-time directors often find it difficult to step away from an operator mentality,” the authors say. A director’s job “isn’t to offer solutions but to probe and constructively challenge management’s proposals to make executives reflect on their decisions. Your objective should be to help the management team see ten steps ahead.” With so many competing priorities to weigh, the ability to ask thoughtful questions about everything from generative AI (gen AI) to the company’s purpose is paramount.

A BIG NUMBER

60

That’s the percentage of directors who, in a global survey, believe their organizations are unprepared to manage the next large-scale crisis. In a conversation about preparing for extraordinary risks, McKinsey’s Celia Huber and colleagues note the importance of identifying “predictable surprises”: events that would, with great certainty, change a company’s entire business. Boards, and new directors in particular, have a critical part to play in this process. “If the board engages in approving strategy, it’s helpful to ask, ‘What would cause this strategy to fail?’” says senior partner emeritus Nora Aufreiter. “New members are sometimes best at identifying long-term core risks because they can step back and ask simple questions that longtime directors may not think of or assume the organization knows the answer to.”

A QUOTE

“Resilience is a new muscle for everyone and how boards and management teams work together to build that muscle is going to be extremely important.”

That’s senior partner Asutosh Padhi discussing the board’s role in building a resilient organization: that is, a company that can change course when faced with a potential shock. So much of a director’s job is a balancing act. Collectively, boards must also walk and chew gum at the same time in preparing their companies for both the current moment and what’s to come. “Fundamentally, board members can think about the balance between defensive versus offensive responses to crisis, short-term versus long-term trade-offs, and appropriately challenging management,” says senior partner Ida Kristensen.

A SPOTLIGHT INTERVIEW

While the board’s role is continually changing, the people part of its work is perhaps more critical than ever—especially for the person at the top. “Being CEO is a lonely job,” says Nicolai Tangen, the CEO of Norges Bank Investment Management (NBIM), in an interview with senior partner Frithjof Lund. “CEOs need someone they can talk to and trust. You are there not only to ask the right questions but also to look for signs of stress and burnout and provide early support to CEOs in need.” And while CEO succession remains a fundamental board responsibility, broader issues of talent, skill development, and organizational culture are now firmly on the agenda.

– Edited by Daniella Seiler, executive editor, Washington, DC

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