August 21, 2018
12.17.2010 - 07:18AM
By Lucy P. Marcus
Bringing sustainability to the boardroom: Lucy P. Marcus of Marcus Venture Consulting gives some tips on Talkback.
As a non-executive board director, I have been thinking a lot lately about what it means to do this role in today's environment. With a dramatically different economic climate in which organizations are now operating, as well as increased scrutiny by stakeholders and governments alike, the nature of what it takes to be a responsible board member, too, has changed. Simply looking over the shoulder of the executive team and offering an occasional word of wisdom or direction is not sufficient. Non-executive board directors today need to be activists to ensure the organizations they serve do not simply survive but thrive. And, the boards on which they serve should demand no less.
The best organizations of all sizes, in both the for-profit and not-for-profit sectors, are looking for active, engaged, independent and interested board members, and they encourage a climate in which having those people on the board can bear fruit. These boardrooms create environments where members are comfortable, and indeed required, to ask hard questions, challenge the status quo and step up to assist in areas where they can. An independent board director should bring independence in word and deed and a fresh perspective to the organization.
Activist board directors engage and reach out. They ask questions inside and outside the organization and seek advice from fellow board members, senior executives, staff and investors and thus gain a fuller understanding of the challenges their organization confronts, as well as the resources and capabilities it has (and needs) to master them. In my experience, this implies a number of different strategies.
First, and especially at the point when joining as a new director, I have found it incredibly useful to reach out to existing directors and get to know them beyond their bios and outside of the structured board setting. Getting to know my fellow executive and non-executive board directors helps to build board cohesion and can make a big difference in avoiding confusion in the heat of the boardroom discussions. Boards function better when the people around the table know and trust one another and feel that they are moving in the same direction.
Second, this focus on people does not stop at the board level. It is essential that today's board directors engage much more broadly. Being approachable and reaching out to people, to talk with, and especially to listen to, senior managers, staff and investors, and understand and respect their views, will in turn help harness their passion and commitment to the organization, thus ensuring its endurance and robustness. Listening to the voices from the organization directly means non-executives board members can incorporate such ideas and perspectives into board papers and reports.
Third, understanding the nuts and bolts of the business also means asking the hard questions. It means not being satisfied with simply asking questions, but doing something with the answers. I have a special interest in finance and the audit committee, so for me that means being comfortable asking hard questions about the numbers - of the past, present and future.
Fourth, non-executive board directors need to keep an eye on the global factors that shape the broader environment in which their organization operates--from government regulation to customer expectations to a constantly changing competitive landscape. This outside independent perspective is indeed one of the greatest assets board members can bring to the table. Keeping on top of these developments is necessary and, in our electronically and humanly networked world, possible. Equally important is the task of seeking and seeing opportunities for the organization to shape its environment.
To bring things back to the boardroom, sensitivity to local and global issues, internal and external matters, and understanding the human and material assets of the organization are core aspects of the activist approach.
In a nut shell, as an active, engaged and accountable non-executive board member in today's boardroom, I constantly strive to have the best possible understanding of the business the organization is in and the one it wants to be in, and of what the organization is and what it wants to be. On that basis I can help devise viable strategies to get from one to the other and contribute to guiding the organizations on whose boards I sit into a successful and sustainable future - and do the job I have been hired to do.
(An extended version of this article was originally published on the Marcus Ventures website.)
About Lucy P. Marcus
The founder and CEO of Marcus Venture Consulting, Lucy P. Marcus currently serves as the non-executive chair of the Mobius Life Sciences Fund and as a non-executive director and chair of the board audit committee of BioCity Nottingham. She is a fellow at the University of Cambridge's Judge Business School and a member of the board of IE Business School. She is a prolific writer on global economic trends and best practices for corporate governance, venture capital, entrepreneurship, biotech, cleantech and women in business, and regularly speaks on these topics to diverse audiences around the globe.
Readers: What tips can you share about being a good non-executive board director? Do you have any cautionary tales to share? Tell us on Talkback!
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