ON Partners, over the last few years, has collaborated with Niche and its CEO to grow its executive leadership team.
WHAT I’VE LEARNED AS A FIRST-TIME BOARD MEMBER
After a Year on EMCORE’s Board, Bruce Grooms Offers Advice to Freshmen Appointees
With over 30 years of executive leadership experience, Bruce Grooms understands how to build, transform and manage complex organizations. As a highly decorated career submarine officer who retired in 2015 as a Navy vice admiral, Grooms is a performance-focused, technically savvy nuclear and aerospace engineer with decades of success at operations, training, leadership development, maintenance and budgets.
Leveraging his military background, Grooms brought his strategic and operational planning expertise to Raytheon, where he served as vice president of Navy and Marine Corps Programs. There, he was responsible for customer relations, strategy, engagement and business opportunities for all of the defense contractor’s U.S. Navy and USMC programs.
Last year, Grooms joined the board of EMCORE Corporation, his first experience serving on a corporate board. After searching for advice for first-time board members, Grooms found only what he calls “paragraphs of platitudes.” A year into his tenure, he spoke with ON Partners managing partner Tim Conti, who helped secure Grooms’ EMCORE board director role, to share his experiences, observations and advice for those joining a board for the first time. Here are his top learnings as a first-time board member:
01: Get to Know Your CEO and Board Chair
Board members need to quickly get an understanding of the CEO’s strengths and weaknesses and how they complement the needs of the company. Few CEOs are omniscient and recognize all the company’s blind spots. Some CEOs may have incomparable engineering expertise or may be masterful in sales and marketing yet miss a blind spot that might exist in financial management. A board chairman might have years of experience in mergers & acquisitions, private equity operations, or understand better than all the best ways for companies to reduce expenses. Understanding leadership’s areas of expertise then making thoughtful efforts to help fill in the gaps is a quick way to prove value to the board.
Build a bond with the CEO. Having regular conversations and coming to the board meetings early to walk about the facilities really helps build trust and leads to a deeper relationship. Often the CEO will share thoughts about areas on which he or she thinks you could focus your educational efforts to add the most value to the company. The same goes with the board chair; discussions with the chair can accelerate your understanding of the company and the market being addressed. They also help identify areas to probe during board meetings, which ultimately makes you better as a board director and more valuable to the CEO. Strong relationships with both leaders are important and serve to demonstrate your intentions are pure and transparent.
02: Understand the Legal Side of The Business
Having a clear understanding of legal issues is critical, and proactively managing them is even more important. There is always a competitor trying to leverage its size or protect its competitive positioning by pulling legal levers. They often have nothing to lose to continue to make filings even when merit is questionable. Ultimately, as a board director you learn that your duty is to protect your company with a long-term perspective regardless of the merit of the actions taken against you. There is no such thing as a small legal matter.
03: There are Rules in Communication
It’s important to get a grasp of who amongst the company’s leadership team and broader board of directors has a talent for customer relations and investor relations. Assess who is best equipped to represent the company in public settings. It might be the CEO, the CFO or the chairman, but it’s important not to let these things happen haphazardly – there are plenty of activists out there just waiting for you to say something actionable. Be involved in managing who plays this role.
On a related topic, make sure you’re educated about when or if you are permitted to speak on behalf of the company. There are issues of confidentiality, blackout periods, and simply sensitive matters that limit information you might divulge. Conversations you have about the company’s performance really do make a difference on who will invest and how. The bottom line is if you’re in doubt, keep your mouth shut.
04: Study Materials Before Meetings
In order to be most effective during board meetings, it’s critical to get relevant materials to review well in advance. For new board members, reading through the package is so important for gaining an understanding of critical issues – pushing to get the information well in advance is essential. Prepare by conducting a thorough review of the materials, researching the issues, asking clarifying questions before the meeting, and impacting the agenda if the materials suggest an important issue is not going to be addressed sufficiently. Reach out to other directors in advance and ask if they have similar questions or concerns. This will build confidence that you better understand the issues and can contribute to the discussions.
If the board materials provided to you are not organized in a way that is helpful and efficient for your study, do not fall into the trap of accepting a substandard package because that is how it is always done. A fresh set of eyes that questions the status quo and makes recommendations for improvement is always well received by the other board members, even if it causes some additional work by the staff.
05: Know Your Business Acronyms
The world feasts on acronym soup. Despite your best efforts, it’s entirely possible that a single acronym could mean many different things. Often new directors will suffer in silence in order to avoid asking what they view as elementary questions. Don’t make that mistake. There truly is no such thing as a dumb question when it comes to executing your role as a board director. Remember, you’re not there to be an operating executive, so you shouldn’t feel compelled to have all the answers when you step into the board meeting. Ask questions, don’t gag on acronym soup, and pursue issues you deem important to the company. If it does not already exist, ask the company to include an acronym glossary in each board package. You will find this invaluable.
06: Get to Know the Organization and its Leaders
Make an effort to get to know senior leaders across your organization, and pay close attention when they present during board meetings to assess their capabilities. As a board director, the CEO may ask for your opinion of key executives, and you need to have done the work to be able to provide useful feedback. Put in time to build relationships with various senior executive leaders outside of board meetings. Meet executives where they are; in other words, have them bring you into their world – whether that’s their functional department, a production facility or an R&D lab – so you can witness them in their environment, which is the best way to really understand their impact on the organization. This process helps give you a sense of the company culture and the level of engagement throughout. But always make sure you get the CEO’s approval to interact with his people.
07: Financial Literacy is Key
When you first join a board, sit in on the audit committee even if you’re not formally assigned. There is no better way to learn the business and the condition of the company than participating in audit committee meeting discussions. If not formally assigned, you will not play an active role, but merely observing the meetings will dramatically enhance your understanding of the company, which is core to your duty as a director. Learn the language of business as quickly as you can. When unfamiliar terms are discussed, record them and look them up later in a financial periodical. Get a clear understanding of which financial data has elements of subjectivity and which do not. Always question the underlying assumptions to better understand the subjective data.
Financial literacy is more than just the balance sheet and quarterly financials, and it’s important to have conversations early on about the company’s cash position and planned capital expenditures, among other items – discussing the timing of these expenditures matters as much as the decision to spend in the first place. If there are ways to enhance shareholder value, it is your responsibility to pursue them.
The coronavirus has had a significant impact and in many cases, companies may be required to permanently change many aspects of their business. This is a very ripe opportunity to require company leadership to present to the board a strategic review of every aspect of the company’s health, growth opportunities and long-term considerations in the face of this world-changing event.
For more tips for first-time board members, please visit our board services practice here.
ON Partners propels an organization’s mission by building C-level and board leadership teams. Founded in 2006 by like-minded consultants as a values-driven alternative to the multi-service global firms they were leaving behind, ON delivers a better executive search experience. Named by Forbes as one of America’s Best Executive Recruiting Firms and to the Inc. 500/5000 Lists seven times, the firm is consistently ranked among the top 20 retained executive search firms in the U.S.
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Since 2006, ON Partners is the only pure-play executive search firm building diverse C-level and board leadership teams. We rebuilt the institution of executive search for the way you work. Our approach includes present partners who engage with their clients from the first brief to the final decision, individually crafted solutions that are unique to each client, and an easier experience all around. Named by Forbes as one of America’s Best Executive Recruiting Firms and to the Inc. 500/5000 Lists nine times, ON Partners is consistently ranked among the top 20 retained executive search firms in the U.S.
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