Maybe you’re nearing retirement or looking to further your experience and skills. You have corporate and/or board experience. You want to continue making a positive contribution in your industry or in your community.
Where do you start?
Boards of directors are always looking for good people. It may be in the public sector, the private, or with a non-profit organization. But a lot has changed in recent years. The days when boards were “old boys’ clubs” that met once a quarter have passed.
Today, the role is much more complex. Board members have a duty of loyalty, a duty of care and a duty to act in good faith in the best interests of all stakeholders along with a fiduciary duty to the corporation. Even the definition of stakeholder has undergone an overhaul, said Debra Alves. More than just employees, customers and shareholders, it can now extend to the community and even society at large.
“People often come in with the wrong hat on,” Alves said. “They have to appreciate their fiduciary responsibilities and who the stakeholders are that they answer to as a member of a board.”
She knows of what she speaks. Currently chief executive of the CBC Pension Plan, Alves also sits on several pension committees outside the CBC and has served on various boards, including the Victorian Order of Nurses. She’s come to appreciate the fine line a board member must walk in order to fulfill their responsibility to drive and support the organization.
Value of cognitive diversity
Recognizing the benefits of diversity plays a big role. This extends beyond gender to include cognitive diversity – differences in how people process information and relate ideas, regardless of factors like gender, age or ethnicity.
“You need to be aware of the value of different perspectives and how those perspectives get a voice, all without being too hands-on with the management team,” Alves said. “Management knows the business better than you do.”
A healthy degree of tension between a CEO and a board is to be expected, as the board strives to stay at arms’ length from the day-to-day operations of the organization, to act as a guiding force for management and as a voice for stakeholders.
Russ Jones, the recently retired chief financial officer of Shopify, knows first-hand what it’s like to be part of a dynamic management team engaged in that push and pull with a board. He previously served as CFO with Mitel Networks, a public company, then helped guide Shopify through its whirlwind IPO three years ago.
Bench strength for the long haul
Shopify’s challenge was to ensure its board included individuals who could provide the leadership the company would need the day after the IPO.
“We didn’t see the IPO as the end goal, just a milestone,” Jones said.
It took a careful balancing act to ensure compliance with listing requirements without burdening a nimble startup culture with a bureaucratic system of checks and balances. This included ensuring board members and management were on the same page about the story Shopify wanted to tell the market.
“Investment bankers will try to tell a story that they think aligns with their own constituents and then you are stuck with it,” Jones said.
Alves and Jones have no shortage of insight to share about how to be part of a board or how to work effectively with one in a world driven by social media and an emphasis on diversity.
However as they approached retirement and considered board participation as a great way to remain productive, they both realized they still had something to learn. That’s why they each made the year-long commitment to obtain an ICD.D designation from the Institute of Corporate Directors (ICD).
The tools to excel
ICD is a national not-for-profit organization with some 12,000 members across Canada that serves as a go-to resource for directors and boards. Services include courses to help individuals be better board members. Earning an ICD.D designation demonstrates “a lifelong commitment to excellence in the boardroom, a desire to stay current, and to be a more effective director.”
“I was quite pleased with both the caliber of the training in Ottawa and the other participants,” said Jones. “The training goes through “soup to nuts.” It’s a great way in a relatively short period of time to get you thinking on all the important aspects (of being a board member) and shorten the learning curve.”
“I found it eye-opening,” added Alves. “It reaffirmed what I understood about a board member’s responsibilities. I am retiring in a few months and looking at where I can add value to other boards with opportunities that match my values and my passions.”
This article originally appeared in Eyes on Corporate Governance, a special publication of the Institute of Corporate Directors Ottawa Chapter. Read the full publication below.