It’s always an exciting time when a position falls vacant on a board. It heralds change and, with it, opportunity.
But change also brings with it uncertainty and perhaps that’s why it’s so tempting to fill board positions with someone we already know really well? Appointing someone well-credentialed who we’ve worked with before or have perhaps known since our university days is reassuring. We know how that person thinks and operates and appointing them means things can get back to feeling comfortable around the board table as soon as possible.
While that’s tempting (and understandable), it’s not always the best answer for the business. Sometimes, the best answer for the business is to seize the opportunity to bring in fresh thinking and a completely new perspective. Sometimes, the best answer is to bring in someone who can challenge the kind of groupthink that can so easily emerge when everyone around the table feels comfortable.
Don’t Choose Groupthink Over Strategic Diversity
What you’re missing out on when you appoint someone you know already is strategic diversity — a different way of thinking to solve the kinds of problems, old or new, that you’re facing today. It’s an opportunity to create positive growth outcomes by taking a new approach to achieve company objectives, as opposed to thinking “well we did it this way 25 years ago and it worked, so we’ll do it that way again now”. A familiar problem doesn’t necessarily always have to be met with a familiar solution. Sometimes there’s a new, better, or more efficient way of doing something. A fresh set of eyes, someone from outside your normal professional circle, can sometimes be the ideal person to provide those kinds of solutions.
None of this is to say that an old colleague or uni mate isn’t the ideal candidate to join your board. If they’ve got the credentials, there’s a good chance they’ll be excellent. And for that reason, they should absolutely be included in your short list of candidates. But your search shouldn’t start and end with them — especially if you want to avoid any potential accusations of nepotism or the risks of groupthink.
Search more broadly. Cast the net. See who is out there. Lean on the professional services of a search firm, with experts who understand your industry and have a large and diverse contact list. Then include some “fresh blood” in the interview and due diligence process.
Good Governance and Groupthink
When you do that, two things happen.
Firstly, you might discover an amazing talent — someone well-positioned to challenge any groupthink and provide great, innovative and strategically valuable leadership on the board.
Secondly, you ensure you’ve met your good governance responsibilities and found the best possible candidate to fill the board vacancy. If that candidate happens to be an old colleague or uni friend, that’s perfectly fine — your good judgement will have been validated. And it means if you’re challenged on it in a shareholder meeting (or in any other arena) about nepotism or the “old boy network”, at least you can point to the independent process that arrived at the result.
Following a best practice, independent appointment process for your next board vacancy is a fantastic opportunity to find the best possible person to sit alongside you at the top table, making the big decisions.
As investments go, it’s all upside.
Lindsay Craig is the Managing Partner of TRANSEARCH International Perth. Over 23 years’ experience in the retained Executive Search industry has allowed him to build an extensive and valued network of local, national and international executives and directors. He works closely with boards and senior leadership teams on structure, remuneration and talent strategies. Based in Perth and operating nationally, Lindsay has completed assignments across many sectors recruiting Chief Executive Officers, Managing Directors, RVPs CIOs, CFOs, COOs, Non-Executive Chairs and Directors, General Managers and Functional Heads. As a result of appointments in the Mining & Resources sector, he has extended his reach into North & South America, Africa, the UK and Russia. Read more…