It is no secret that in the past many corporate boards did a less-than-sufficient job of onboarding directors. In the days when new board members were often known to one or more of the existing directors, the lack of a well-designed onboarding process did not significantly impact the overall contribution of that individual. Informal networks would often fill the gap.
But never before has a strong onboarding process been more critical to shaping a high-performing board. Even as governance responsibilities are becoming more expansive and complex, a growing number of first-time directors are entering boardrooms. During the pandemic, boards typically met more frequently but remotely, leaving little opportunity for new members to build relationships. The first-year experience also needs to be more than just a review of the company’s financials and strategic objectives and should reflect the needs of a growing number of diverse directors as well.
THE IMPACT OF DIVERSITY
With a deep commitment to board diversity, 75 percent of Allegis Partners’ board placements have been diverse since 2018. But building a high-functioning board can’t end with the placement.
Billie Williamson, a former EY partner who led the firm’s diversity and inclusion efforts, has served on the boards of nine New York Stock Exchange-listed companies over the past 10 years. “A board may include diverse directors but not harness the benefits of that diversity. It is a twofold problem,” she said. “New board members need training to be able to work well with the board, and board leadership also needs training on how to derive value from diversity.”
Kimberly Chainey, executive vice president, chief legal officer, and corporate secretary at AptarGroup, became a director at semi-conductor laser company NeoPhotonics just before the company became the target of a technology merger and acquisition deal. While new, she was quickly engaged in guiding environmental, social, and governance (ESG) work and focusing on regulatory impacts of the deal, since completed, which required full engagement in the biggest strategic issues. Comprehensive onboarding got her up to speed fast.
A BETTER FIRST! YEAR EXPERIENCE
How can companies create a better first-year experience? Along with Williamson and Chainey, we spoke with Michael Millegan, a former senior telecom executive and a director of Axis Capital Holding, Portland General Electric, and Wireless Telecom Group. They offered the following action items for boards: