Take a seat to become a better leader
The skills you learn around the board table could have a big impact on the way you run your business. Here are six of the benefits.
As a director on a board you help make decisions for the good of an organisation and its stakeholders – but it isn’t just a one-way street. The experience you gain in the boardroom could sharpen your skills, expand your knowledge and help you become a more effective business leader.
Ann Sherry AO is well placed to know – she’s currently Executive Chairman of Carnival Australia, Chair of UNICEF Australia and holds non-executive positions on eight other commercial and not-for-profit boards, including NAB. She shares her thoughts on the potential benefits of joining a board.
Develop your leadership skills
The boardroom is a great place to learn from other leaders as you build your confidence and interpersonal skills.
“The best boards bring together a range of skills and experience – and the directors shouldn’t automatically agree on everything,” Sherry says. “A better dynamic is robust engagement with some disagreement. There should also be enough mutual respect for directors to thrash out their differences and achieve consensus on the best way to take the organisation forward.”
Gain insight into other sectors
The boardroom is all about the exchange of ideas that might well apply to your own business.
“I was an executive when I first joined listed boards and I benefited from gaining an insight into other sectors,” Sherry explains. “There are some issues that are baseline for almost every company now, such as Health & Safety and technology, where everybody is trying to work out how they can leverage the rapid changes. As a director you can learn from organisations that are doing it well.”
Learn the difference between board and management
The board’s role is governance, not management, and the difference becomes much clearer when you’re on a board.
“The board oversees the activities of an organisation, helps guide the CEO in a strategic direction, asks questions of executives and assesses their answers,” Sherry says. “Understanding the way it differs from management can be very useful, particularly if you’re considering setting up a board of your own in the future.”
Apply best-practice governance
Governance isn’t just for big companies – and it’s not just about complying with formal rules and regulations. According to the Australian Institute of Company Directors (AICD) publication SME Business Owners/Directors: Good governance – A roadmap for growth the basic principles of good governance are fundamental to the sustainability of all businesses whether they be small, medium, large, family-owned, private or public companies. Gaining first-hand experience of governance in another organisation can help you implement best practice in your own.
Make a difference in the community
Many directors begin their careers with small community organisations.
“I believe these are good places to learn about the role and responsibilities of the board,” Sherry says. “You may also have more influence than on a commercial board because you may need to be a bit more hands on.”
A directorship comes with a great deal of responsibility and accountability.
“It’s important to understand your liabilities and exactly what’s involved before you join,” Sherry says. “There are courses for aspiring directors that also cover topics such as financial literacy, effective decision-making and strategic thinking – issues which could be of benefit to every business owner and executive.”
This article was first published in Business View magazine (Issue 25).