by Nels Olson
As a recent article in the Wall Street Journal noted, “companies eager to stay on top of hot technologies or facing pressure from activist investors are choosing more youthful directors.” It is clearly a trend, and these additions are often significantly younger— sometimes a generation or even two—than those who represent the existing board team.
But boards should not stop at recruitment if they want their efforts to really pay off. Rather, they should support the new director’s integration into the board over an initial period to set him or her, and the board, up for success.The first step before adding anyone new to the board is to understand the strategic reasons for doing so. It’s easy to be swept along with what is viewed as the latest board-recruiting trend, in this case the 20-something wunderkind with new-age skills that may be lacking on the board. Resist that impulse.
The place to start, as always, is to carefully consider the company strategy, then determine what skills and experience are called for on the board to support the strategy, take stock of what the board already has, and identify gaps in capabilities. If that analysis determines that a younger director who possesses limited, if any, board experience can provide needed skills, by all means go full steam ahead, albeit with the customary thorough vetting process as well as with realistic expectations and a thoughtful plan.
It is important to recognize at the outset that younger directors with limited board experience may have a higher credibility hurdle to get over and a steeper learning curve before they are able to contribute on a par with more experienced co-directors.
Expect some skepticism from established directors when adding a new director who combines youth and inexperience along with coveted skills. But board culture and process can be learned and, remember, part of the value the new director brings is a fresh perspective on key issues as well as real-world experience in an area that has been targeted as important to the board.
For any new candidates a board is considering, and especially for someone with less of a business and board track record, determining proper fit with the rest of the board team is essential. Rely on proven assessment tools and enlist current directors by making sure the nominating/governance committee and the rest of the board have realistic expectations and are prepared to do their part in helping to integrate the new director.
An effective on-boarding program and orientation should be established for any new director but, again, it is even more important to bolster an inexperienced director to become a contributing member of the team as soon as possible. Many companies have their own formal on-boarding process. For those that do not, fortunately there are many quality programs available, provided by the NACD and others.
In the case of a younger director, the board may also want to consider forging a mentoring relationship as part of the on-boarding process. Teaming an experienced director, who can be both guide and confidant, with a new recruit can help to accelerate the integration process considerably.
Any board that has expended the time and effort to attract and recruit a first-time director with much-needed skills to the board should not stop there if it wants the relationship to produce desired results. Investing in a process designed to smooth the way for a new director, and incidentally bring the rest of the board along, will greatly increase the odds that the experience will be a valuable one for both the director and the board.
Nels Olson is vice chairman and co-leader of the Board & CEO Services Practice at Korn/Ferry International.