Board directors play a key role in organisations, yet their tasks are not always straight forward. Risk management, getting a grasp on competitive intelligence and helping define a company strategy are their top three challenges, according to a survey held among executives.
Given the wave of corporate governance reforms, board members face new challenges these days. New global business opportunities pose important questions to most boardrooms.
Key challenges are budget/resource constraint, conflicts of interest/related party transactions, sometimes over representation of controlling shareholders to mention a few. While these get talked about & discussed, what also needs emphasis is the role boards play in shaping corporate culture and the importance of a clearly defined succession plan for any board.
In the centre of all this, is the human resources function which traditionally has been an insignificant minor player in the boardroom, even as critical matters that HR closely deals with-talent, culture, and executive succession are assuming greater significance for the board than ever before. Until recently, playing a second fiddle support act, HR Heads have been "late to the party" across corporate boardrooms. But with the people function playing a crucial and central role in realising the company vision, more practitioners will have their feet under the boardroom table.This is soon becoming a Reality!
The Role of the chief human resources Officer (CHRO) in the boardroom is just as important as the chief financial officer (CFO), marketing officer(CMO) and operations officer (COO). If you look around at some of the best companies today, their HR Head/Function is a strategic partner to the business & board. What works in the boardroom is about knowing the business, being able to speak to the business, and how the HR interventions being evaluated can impact the organization by an increased percentage in terms of revenue, engagement, talent growth, etc. Execution is absolutely key and being able to drive these interventions effectively is crucial. Everything comes down to the bottom-line. One has to quantify one's proposals & plans. Furthermore, influencing, negotiation and selling skills are key for HR folks with the board to get them to bless what they want. Practitioners need to be just as comfortable talking about costs, profit and strategic risk management as they are talking about reward or talent. Human resource professionals bring a valuable perspective to the boardroom; you can't have a boardroom that understands all areas of the business without understanding its people. Many of the issues faced by boards sit squarely in the HR remit. This includes succession planning, talent management, remuneration, ethical leadership to name a few. On a positive note, HR has emerged stronger by increasingly participating in organisational decision making, with a greater focus on value adding people strategies. There is much more to do. Such is the opportunity available to us!!!