The Perfect Director

By Peter Bartram, this is an edited version of an article that first appeared in Director Magazine (http://www.director.co.uk/).

20 ways to make your contribution count on the board whether as an Executive Director or Non-Executive Director.

1. Understand your role. Directors come to the job from a number of different directions. There are four key possibilities: executive director in a private company: non-executive director in a private company, exec in a public company, non-exec in a public company. "It's a very good way of looking at the director's role," says Patrick Dunne, group communications director for 3i Group and a visiting professor at Cranfield University School of Management. The contribution you're expected to make could be different in each. Professor Colin Coulson-Thomas, who serves on the IoD's professional accreditation committee, adds: "The board should be the heart and soul of the company, the source of its ambition and drive. Whether a company competes and wins, sustains success and remains relevant, usually depends upon its board."

2. Define your contribution. Find out what the company is expecting from you even before you join the board. Speak frankly to the chairman in pre-appointment discussions. John Harper, a former professional development director at the IoD who has served on the boards of more than 30 companies, has personal experience of how this can avert problems ahead. "In the final interview before I was offered a non-executive directorship, I asked the chairman what I was expected to deliver to the board," he recalls. "To my surprise, he came out with a whole list of stuff that hadn't come out in previous discussions. It was stuff I didn't feel I could deliver."

3. Get to know key players. Joining the board of an existing company is like stepping into a moving river. It's important to understand where the company has been and where it's heading. Harper's advice is to have early informal discussions with other important directors, including the chairman, chief executive and finance director. "It will help you get up to speed more quickly, but it will also impress the other players that you're taking your responsibilities seriously."

4. Absorb corporate strategy. If you're a new director, you should make sure you fully understand company strategy. "Get hold of any strategy documents, even go through the minutes of previous board meetings, perhaps with the company secretary," advises Harper. If you're an existing director, keeping up to date with new developments is vital. Harper advises all directors to develop what he calls "strategic perception", which means being alert to the need for change, creative about the ways in which changes could be made and alive to the company's strengths and weaknesses which may influence the viability of future directions. "It's also about perspective," he says. "Rise above the immediate problem or situation and see the wider issues and implications."

5. Develop key directorial qualities. In his new book, Chairing the Board (Kogan Page), Harper defines these as: "capability to take a wider view than confined by their background or discipline; political astuteness and sensitivity; good interpersonal skills; ability to listen and to communicate ideas, concepts and facts succinctly and emphatically; financial awareness and numeracy; business competence; good judgement, common sense, diplomacy; strength of character, courage, integrity, wisdom; relevant experience, special knowledge and skills." Dunne boils directors' key qualities down to three: "They must have great judgement, very good interpersonal skills and very good antennae, so their judgement is well informed."

6. Learn the difference between managing and directing. This is important for senior managers rising to the board for the first time. "A lot of people are appointed to the board because they have done a good job as a manager, but aren't quite sure what they're supposed to be doing as a director," says Harper. Their functional specialism is important, but they also need to take the broader view. "Directors of winning boards understand the distinction between direction and management and their directorial duties and responsibilities," says Coulson-Thomas, whose book Transforming the Company (Kogan Page) is recommended by the IoD. "Directors of winning boards assume personal and collective accountability for their actions."

7. Bone up on finance. Not all directors have a financial background, but it's not easy to be an effective director without at least a reasonable working knowledge of finance. "Somebody who's just been promoted to the board has to understand the financial side," says Harper. "They don't need to get up to the competence of a finance director, but they need to understand the numbers and the implication of decisions in financial terms." The IoD's course Finance for Non-Financial Directors can help. It translates financial jargon and shows how non-financial directors can evaluate and monitor a company's financial health - and spot warning signs.

8. Take some training. Boards often spend money on training the workforce, but ignore their own needs. "I think everybody can raise their game, no matter how good they are," says Dunne. "Any top performer in sport or music practises and thinks a lot about their game. I think the process of getting together with people doing a similar thing and exploring how you go about it inevitably leads you to think more carefully about how you do it and improves your game." The IoD offers an extensive range of training courses for directors.

9. Become an ace influencer. Directors who are most valued in the boardroom are those who know how to guide decision making in a constructive way. It's a question of developing the skills of putting forward an argument in a way that doesn't get fellow directors' backs up. "Focus on the issues rather than personalities," advises Harper. "Never tell a fellow director they've got something wrong because they'll take it as a personal challenge. It's far better to say something along the lines of: 'I have problems with getting those facts to stack up with my understanding of the situation.' You are making it impersonal then."

10. Have the courage of your convictions. Being diplomatic about the way you raise issues doesn't mean you shouldn't pursue the topics you feel strongly about. This is particularly important when ethical questions arise - as they do increasingly in the business world. That's when you're most likely to upset fellow directors who may be less insouciant about sailing close to the wind. Harper advises: "You could say something like, 'I don't want to be awkward, but this is an ethical issue which seems to be hiding under a difficult business decision.' Explain why and say enough at least to give the chairman some doubt and want more consideration of the matter."

11. Develop communication skills. Whether putting forward a contentious or non-contentious case - or simply interacting with other directors and members of staff - most directors can do with working up their communication skills. Part of that comes down to becoming a good listener, advises Harper. "Listen dispassionately, intently and carefully so that you recall key points. Take them into account and question when necessary to ensure you understand."

12. Use boardroom body language. Become aware of the extra power that carefully controlled non-verbal communication can give you in the boardroom. Roger Jones, managing director of executive-development company Success Talks, points out that words count for only seven per cent of the impact you make, while voice makes 38 per cent of the impact and your body language 55 per cent. Jones advises: "Start to be a detective by observing others and you soon start to increase your awareness of how they use non-verbal communication to persuade."

13. Become a real team. The best directors work as an effective team, complementing each other's skills and knowledge. But teamwork doesn't just happen - it has to be worked at. As Coulson-Thomas points out: "An assembly of impressive individuals doesn't necessarily constitute an effective board. Its contribution will depend critically upon the interplay of people and personalities. As existing directors retire and new members join the board - and situations and circumstances change - its performance needs to be regularly reviewed." Team-building guru Meredith Belbin has identified nine different roles in three groups: action-oriented, people-oriented and cerebral roles. Most of these should feature on well-balanced boards.

14. Be open and accessible. Not only to other directors but also to senior members of staff. You'll be a board member partly because of your knowledge and experience, and the company will benefit if you make that available when it's needed outside as well as inside board meetings. "When I've been a non-exec, I've had quite regular conversations with people between board meetings," says Harper. "Often it's just been when somebody wanted to pick my brains, but I've also realised that it's useful to have two-way conversations."

15. Defend the company's reputation. The board, more than anybody else in the company, is responsible for its reputation with its various stakeholders, such as customers, shareholders and employees. In these days of 24-hour media and investigative journalism, reputations can be tarnished - or destroyed - faster than ever. Focus on building the company's policies on corporate and social responsibility, and monitor their implementation alongside financial measures. Seek help on CSR policies from the government's CSR Gateway at www.societyandbusiness.gov.uk or the John Madejski Centre for Reputation at Henley Management College.

16. Focus on real risks. One of the best ways to avoid reputation damage is to focus on risk management. Directors of listed companies should already be ensuring their companies comply with the recommendations in the 1999 Turnbull Report (Internal Control - Guidance for Directors on the Combined Code) published by the Institute of Chartered Accountants in England and Wales. But directors of unlisted companies also need to identify and manage more proactively the main risks facing their companies under five main headings: market, credit, operational, legal and miscellaneous risks.

17. Keep a grip. It's too easy to lose touch with the real world when successful executives in the company present imaginative plans for the future. "Keeping a grip on reality can be tricky for highly successful executives and even harder for those teetering on the edge of failure," Dunne advises. "Dangerous feelings of invincibility, delusions of competence or loss of confidence easily emerge unless someone gives you a regular dose of real-world calibration. Good independent directors do this."

18. Develop an international perspective. Increasingly, globalisation will become a reality rather than a buzz word for all businesses, almost no matter how small. "One of the biggest challenges of the future is having a board with an international mindset," says Dunne. "The world is changing very fast and even quite small companies have to compete internationally."

19. Review board performance. "Boards can go off the boil," says Coulson-Thomas. "They can lose their way and their grip on events. Board effectiveness and directorial competence cannot be assumed. Both have to be worked at." Harper believes it's a useful exercise for directors to evaluate the performance of their colleagues, under the tactful auspices of the chairman is. "If the chairman doesn't take the initiative in this field, it may be a good idea for the directors to do it themselves."

20. Become a Chartered Director or go an a one day IOD Course on: The role of the Non-Executive Director. Becoming a Chartered Director is the ultimate qualification for the director who wants to stand out as a true professional. According to the Co-operative Insurance Society, it's the "gold standard" in directors' qualifications. The Society has written to the 700 companies in which it invests to recommend the qualification to their directors.