Ask a public company director what their onboarding process was like 15 years ago and you’ll likely be met with a quizzical look or laughter. Even as recently as ten years ago, few companies conducted what could be described as a robust or thorough onboarding process. I have interviewed directors who’ve quipped that their onboarding process was 18 holes and a couple of bourbons. Even today, you are likely to find that the notion of onboarding for excellence has yet to appear on many boards’ lists of governance best practices, or practices in general.

Boards that do have robust onboarding programs understand that effective onboarding is an essential element of effective governance and that boards need to be strategic about their onboarding process. Organizations of all kinds – public corporations, private companies, utilities, nonprofits, etc. – should understand that governance is as much about opportunity as it is about risk and compliance. Strong  governance frees an organization to pursue its business and strategy objectives, innovate, and differentiate itself in the marketplace. Each new director or trustee recruited by the board is an opportunity to advance the board’s effectiveness in all aspects of governance.

What has changed?

Until we were midway through the 1970s, public company directors were almost exclusively hand-picked by the CEO from within the company’s ranks and they had a largely passive role. Orienting directors focused on the nuts and bolts of their new role and consisted of handing over volumes of information and setting up meetings with the other directors. In the 1970s, when the board’s role had shifted to one of monitoring management (rather than being composed of management), boards began recruiting independent directors from outside the company. The intervening decades ushered in other significant changes in corporate governance, but as we’ve seen from a series of corporate crises, there is always room for improvement.

A board’s ability to effectively carry out its oversight responsibilities, and each director’s ability to honor their fiduciary duties of care, loyalty and obedience – the bedrocks of good governance – begin with board processes that support those goals. Boards spend a lot of time, thought and effort recruiting qualified new members who will bring valuable expertise and experience and who have the capacity to elevate the board’s effectiveness. Onboarding those new members should be done just as intentionally.

The challenge of getting up to speed

In the past, boards gave new members up to a year to attend meetings essentially as board observers, with no expectation that they would participate substantively in board discussions during that time. The days of easing in to things are over; new directors need to and want to contribute from the start.

Successful onboarding requires a commitment from both the board and the new appointee. A weak process can’t adequately prepare even the most dedicated director, and an otherwise strong process won’t be enough if a new board member is unwilling or unable to rise to the challenge.  Onboarding for excellence requires that all parties commit fully to a robust onboarding framework so that both the board and the new board member derive the most benefit from the presence of that new member on the board.

A formal new director orientation program is a good place to start, but onboarding is a process that requires more than handing over thick binders of information and scheduling meetings and presentations before the first board meeting. An onboarding framework takes into consideration each new director’s unique situation, with input from the director, to customize a framework that will provide a foundation for success for both the new director and the board.

Every onboarding process will include core components, including information about the organization, its industry, regulatory and compliance matters, board structure, administration and policies. However, onboarding for excellence must go beyond the nuts and bolts. Onboarding must also provide an opportunity for the new director to understand the fundamentals of corporate governance, his/her fiduciary duties as a board member, and the board’s role in governance and strategy. One of the hardest challenges for a first-time board member is understanding the distinction between the role of management and the oversight role of the board. This may be particularly true for new directors who are active in a CEO or other executive officer capacity.  

Onboarding must align with the board’s efforts for continuous improvement and should be framed as a dynamic process. To address questions that are perhaps outside the scope of the onboarding manual, a mentor can be a valuable source of insight, information, feedback, and connection for both first-time and more experienced new board members. Site visits and meetings with teams throughout the organization provide opportunities for new directors to understand the business of the organization, but they are also an opportunity for new – and incumbent – directors to gain a sense of the organization’s culture and tone from the top. Participation in continuing education for all board members should be encouraged – from conferences and seminars geared specifically for directors and trustees, to board retreats, and presentations by experts on relevant topics.  

Perhaps one of the most impactful and effective tools for continuous improvement is an annual board assessment that includes individual director assessments and a director skills matrix. It provides an opportunity for candid self-reflection and constructive peer feedback, yielding valuable insight that is focused on improving effectiveness and directors’ ongoing professional development. For new board members, in particular, the process of a peer and self-assessment offers a valuable gauge of their performance early on.


Governance is about opportunity. Boards of today are starting to look different from boards of the past. In an effort to increase diversity of background and perspective and to bring on much needed expertise in innovation and emerging technologies, boards are looking at candidates who are more likely to be first-time directors and industry outsiders who are younger and still working. Between 2017 and 2018, less than one third of new directors appointed to Fortune 500 company boards had prior board experience. Regardless of their background, however, the goal of every new board member must be to become educated and knowledgeable about the organization’s business plan, its customer acquisition strategy, regulatory environment, and operational challenges as quickly as possible. The goal of an onboarding program is to provide that opportunity. Onboarding should excite a new director to contribute to the governance value chain.  

Benefits of Onboarding for Excellence

  • Full engagement and active participation
  • Ability to properly challenge
  • Understanding of board and company culture
  • Focus on principles of governance
  • Clarity on the distinction between the board’s oversight role and management’s role

Orientation and Onboarding Topics

  • Fundamentals of corporate governance and the board’s role in governance and strategy
  • Directors’ fiduciary duties and responsibilities
  • Company history, mission, vision and goals
  • Culture of the company and the board
  • Short- and long-term strategy, priorities, and challenges
  • Financials
  • Company industry, competitive landscape, and risk
  • Board structure, administration, and policies
  • Regulatory, compliance, and related matters

Dos and Don’ts

  • Don’t bury new directors in volumes of information
  • Do provide a series of well-planned focused presentations with references to resources for additional information
  • Don’t fast-track the process
  • Do be intentional and allow adequate time for processing and understanding information
  • Don’t count on new directors to feel comfortable asking questions right from the beginning
  • Do partner new directors with a mentor who can serve as a go-to for questions and guidance
  • Don’t assume new directors will discern the company and board culture in time
  • Do schedule site visits and meetings with management and other personnel for a first-hand look
  • Don’t assume the learning is ever done
  • Do provide ongoing opportunities for continuing director education

New director’s responsibilities

  • Ask questions and actively listen. After Board meetings, ask the chair and the CEO if your questions hit the right tone.
  • Attend all board meetings and as many committee meetings the board allows
  • Meet with board and company leaders, external advisors, e.g., auditors
  • Visit headquarters and other company sites
  • Seek out a mentor on the board for insight, guidance and feedback
  • Read, read, read and be prepared to read quickly

Resources for New and Seasoned Board Members

  • Ira M. Millstein Center for Global Markets and Corporate Ownership at Columbia Law School – Board Leadership Forum here and Governance Leadership Forum here
  • John L. Weinberg Center for Corporate Governance at University of Delaware here
  • Kellogg Executive Education at Northwestern University here
  • Rock Center for Corporate Governance at Stanford University here
  • UCLA Anderson Executive Education – Corporate Governance here
  • Harvard Law School Forum on Corporate Governance and Financial Regulation here
  • Nasdaq Governance Solutions here
  • Corporate Board Member here
  • Society for Corporate Governance here
  • Commonsense Principles 2.0 (2018) here

Corporate governance provides foundational integrity that supports an effectively managed organization. Excellent governance requires skill, insight, and informed, objective decision-making. Governance is like a plant’s root system. The visible health and strength of the plant (company) depends in large part on the health of the root (governance) beneath the surface. Like the root, governance is the (mostly) unseen vital anchor and stabilizer. Think of a healthy oak tree as a metaphor for strong governance. The tree is the company and the taproot is its governance vis-à-vis the board of directors. Board culture, processes, structure, policies that support strong governance and accountability are the fibrous roots growing from the main root. The board grows a strong governance root structure by being strategic and focusing on long-term performance.

The impact of conflicts and bias

Damage to a root may be difficult to discern at first, but eventually the plant displays signs of weakness and dieback. Careful pruning and soil amendments can save the plant. Similarly, appropriately addressing potential conflicts and common biases that impact decisions is crucial to diligently and responsibly sustaining effective governance. Back to our taproot metaphor. Soil amendments (or culture improvements) must be thoroughly mixed into the soil, and for a board, addressing biases must be intentional and deliberate so that benefits of being a forward-looking body can be maximized.Enlightened governance is able to recognize the barrier to objective decision-making rooted in bias. Some biases stem from basic social constructs: friendships, business relationships, peer pressure, loyalty, and self-interest. But if biases like racism, sexism and conflicts of interest pervade a board, the results can be devastating to company culture and bottom line profitability.

How bias inhibits great governance:

  • A board is reluctant to ask the right questions
  • The group is unable to fully and effectively involve new board members
  • Excessive deference is afforded to a few board members with a long company history
  • Peer pressure and conformance minimize constructive dissent
  • Inflexible adherence to tradition limits consideration of new initiatives

At a time when the importance of corporate governance has been firmly settled, we need to better understand how bias impacts governance and be more intentional about addressing it. Perhaps more than at any other time, we are wrestling with subtle “unconscious” biases that are hidden in the soil of corporate culture. Consider, for example, inattentional blindness that causes the board to miss obvious evidence of systemic issues and biases favoring cultural norms of politeness that discourage candor and constructive debate. Or boards that prioritize certain skills, experience, knowledge, and personal attributes in selecting new members, hoping to find a “good fit,” i.e., someone who looks, sounds and thinks like the board does. Here, implicit bias prevents a board from finding the right person with the potential to contribute meaningfully.

Mitigating bias in governance

Boards tend to rely on individual directors to recognize and control their own biases, but few of us are sufficiently self-aware and candid about our own inherent biases to be able to do this. Every board member must acknowledge that implicit biases impact his/her objectivity.

In our work, we’ve observed a tendency or bias within governance circles to assume that the CEO, management, and board are effective and acting in the best interest of the company and its shareholders. However, the public has lost trust in company leaders due to what the public sees as pernicious effects of conflicts of interest and bias. We believe that these conflicts and biases are often the outcome of humans’ susceptibility to fear and greed, which breed bias. Developing self-awareness is an ongoing and exciting element of growing as a leader. As John Wooden said, “Success is peace of mind that is the direct result of self-satisfaction in knowing you did your best to become the best that you are capable of becoming.” Resolving conflicts and identifying bias is an essential element of being one’s best as a skillful leader and highly effective board member.

Boards Are Restoring Trust In The Social Contract

Trust is a powerful relational and social axiom historically associated with the financial sector. Business contracts, like social contracts, require trust. Among the most important social contracts is that between the banker and the customer. Whether a customer is obtaining a home mortgage, financing cash flow or acquiring a business, trust is a core element of the relationship. Yet distrust for the financial sector looms large today. Dynamic financial-sector management and board leaders are responding by advancing efforts to restore the trust in the social contract. The human, or “H”, factor within financial organizations in this social contract is essential to successfully rebuilding trust and creating sustained economic growth.

“It takes a lifetime to build a good reputation, but you can lose it in a minute.” 

–Will Rogers

Perpetuation of distrust

Leaders within the financial sector presently possess extraordinary influence and are in a unique position to create opportunity. The financial sector manages more capital today than ever before. Consider the fact that the top 500 asset managers influence more than $50 trillion globally. (By comparison, the 2019 US government budget is $3.8 trillion.) With projected global growth estimated to be 25 percent from 2017-2022, the opportunity to creatively invest in profitable areas that grow and benefit the community is significant.

Part of the challenge for the financial sector is that today, the top 5 percent of households own more wealth than the bottom 95 percent combined, with the financial-services sector paying the highest average wage rates. The fallout due to the highest paid sector allegedly causing the financial crisis has perpetuated a culture of mistrust towards the industry.

The vision of a truly great capitalist society is of one that wisely manages risk in order to maximize the financing of human endeavors. Investing in our fellow humans has steadily brought us out of financial crises in the past and particularly since 2012. Capitalism for the few is a narrow-minded, weak social model. History is replete with stories of visionary leaders, such as Ada Lovelace, who invented the first computer program, and Colman Mockler, who led Gillette for 15 pivotal years. Visionaries such as these inspire others to improve the conditions implied within the social contract, grow businesses and in doing so, promote prosperity for all.

For the financial sector, finding ways to efficiently finance additional growth and create jobs will contribute towards reducing poverty and thereby build goodwill and trust. The United Kingdom and the United States each have approximately 5.7 million private-sector businesses, the majority of which employ less than 500 employees. Directing the 25-percent expected growth towards building communities, financing new business ideas and capitalizing growth will reduce economic disparity. Promoting an H factor of empowering and educating humans to improve their standards of living demonstrates impactful leadership.

Culture and the H factor

The H factor in finance is at an inflection point. Customers are again beginning to trust financial-sector leadership. However, if the prevailing leadership returns to the pre-2008 business model, the trust factor may be destroyed for future generations. Nurturing and fostering a culture within its organization and with its customers that promotes a trust-based social contract is the responsibility of every financial organization’s directors and officers.

What challenges do financial companies face in ensuring that past mistakes arising from a toxic culture of greed and selfishness are not repeated? Technology has fueled many efficiencies and increased the top-end speed of change and disrupted the financial sector, but technology is not necessarily improving culture. A healthy culture arises from face-to-face communication and interaction between humans within an organization. As younger generations continue to show a preference for the use of technology in lieu of direct human interaction, building and maintaining a culture of trust between customers and banks will remain a challenge and an opportunity for forward-thinking leaders.

“Banks have not traditionally scored well in terms of employees finding their work purposeful. This creates a critical opportunity for banks that can make the right connections between their employees and their organization’s mission, vision and values.”   

-Bruce Van Saun, CEO, Citizens Bank

During the past 200 years, volumes of novels and social studies have examined the depravity and loneliness of greed. Rob Kaplan, CEO of the Federal Reserve Bank of Dallas, Texas (his last job was as a Harvard professor), frequently teaches that happy and inspired employees are the most productive. We are often tempted by the desire for more money and to buy more things, hoping those purchases will improve our lives. What we actually desire is unequivocal confirmation that we are valued. Few of us will lie on our deathbed wishing we’d bought more crap; rather, we will all hope that our lives were meaningful. Inspirational leaders develop human-resources (HR) strategies for work-life-productivity balance and in this way build a culture conducive to happiness.

Leaders in the financial sector teach us, within the context of the social contract, how to manage capital efficiently. Great leaders are honest, humble and give of themselves, and are keenly aware of their leadership responsibilities. Great strategy supported by great culture is an eminent goal. Beginning with the influence of great thinkers such as Peter Drucker in the 1950s, the notion of service and excellence became central to business leadership. Drucker was famous for asking insightful and poignant questions and offering proverbs such as “Start with what is right rather than what is acceptable” and “Management is doing things right; leadership is doing the right things”. This notion influenced the definition of Level 5 leadership first presented in 2005 by Jim Collins in his book Good to Great: Why Some Companies Make the Leap… and Others Don’t. “Level 5 leaders display a powerful mixture of personal humility and indomitable will.”

Ten years later—lessons learned

Since the breakup of Arthur Andersen and the many listed-company failures from 2000 to 2010, corporate governance and leadership expectations have shifted. The board’s role has, is and will continue to evolve. As the average tenure of a public-company chief executive officer decreases, the board’s responsibility of managing business continuity and succession has increased. The board’s role in monitoring strategy and culture has expanded. The H factor is an increasingly significant differentiator. One example is the expanded definition of “our customer”. The updated definition encompasses both the buyer and employee as a part of the company’s customer group. The attraction and retention of talent and buyers have grown to be similar management tasks. Expanding the definition of customer causes leaders to care differently about the culture of an organization. Today’s customers care about workplace diversity, the global environment, sustainability, income equality and, yes, governance.

Ten years ago, discussions of corporate governance were mostly limited to the halls of academic institutions and regulatory entities. Strangely, corporate governance was thought to be mostly or merely legal and rule-centric. This misconception was a failure of business culture at large. Evolved and effective corporate governance includes policies and procedures that provide for both opportunity and accountability, powered by Level 5 leaders. Governance is highly strategic and is essential to elevating and sustaining a company’s culture. In this regard, it is a foundational element of the social contract of trust between customer and firm. A positive “tone from the top” can ignite a culture of continuous improvement that is attractive to employees, customers and the public.

“The times they are a-changin’,” sang Bob Dylan during the 1960s in the midst of global social upheaval and change. Today, we are in the midst of similar change, particularly within the corporate culture. We are making some progress in the boardroom and the C-suite, as the “loser now that will be later to win” is the person of difference who is earning and gaining positions of leadership. But there are still those who, if they don’t “start swimming”, will soon “sink like a stone”; those who are narrow-minded, over 65, pale-skinned and in possession of both X and Y chromosomes—if they don’t “heed the call”.

Leadership, care and governance

Fulfilling the Duty of Care is more than showing up for four board meetings and reviewing financials. Highly effective leaders exercise care on an intellectual, emotional and even spiritual level, as in, “What do you really believe about the business and its contribution to society?” The Duty of Care is a legal board responsibility; caring requires a deeper human level of engagement, including knowing the business well.

The interplay of board and management is among the most important elements of a company’s culture. Furthermore, the interplay of board, management and employee contributes to the fulfillment of the social contract and is intrinsic to corporate governance. Employees may not know their company’s board members and management personally, yet their influence is noticed and often discussed on social media.

Great governance and great leadership are inextricably linked. In his 2019 “Letter to CEOs”, Larry Fink writes, “Unnerved by fundamental economic changes and the failure of government to provide lasting solutions, society is increasingly looking to companies, both public and private, to address pressing social and economic issues.” And, “One thing, however, is certain: the world needs your leadership. As divisions continue to deepen, companies must demonstrate their commitment to the countries, regions and communities where they operate, particularly on issues central to the world’s future prosperity.” A well-governed organization inspires the confidence of all stakeholders.

“Culture eats strategy [and governance] for breakfast”

–Peter Drucker

A failure of culture is a failure of governance. Wells Fargo suffered 10-figure reputational damage resulting from the misdeeds of bank employees. “It takes a lifetime to build a good reputation, but you can lose it in a minute.” How many terrific ideas have failed due to a founder’s, manager’s or board’s failure to recognize the importance of the relationship between culture and strategy? A company needs the right strategy to thrive, but strategy needs the right culture to succeed. The right culture can be immeasurably impactful.

“Ten years ago, the first wave of the millennial generation was settling into early adulthood just as the economy dipped into the Great Recession. Memories of foreclosed homes and savings lost in a Wall Street-fueled crisis continue to influence where they put their money.”   

–Kate Rooney, CNBC, September 14, 2018

Like trust and careneighbor is another word with strong business and cultural implications. “Like a good neighbor, State Farm is there” is that insurance company’s familiar jingle. Crisis often brings us—neighbors—closer together. The rising generation who have entered the workforce within the last 10 years were not impacted by the global financial crisis (GFC) in the same way as their parents. However, Millennials, who tend to choose apps and algorithms over human interaction, will need evidence that a banker or wealth manager is a good neighbor and provides benefit. In addition, this rising generation base their decisions regarding trustworthiness not on face-to-face interaction but on the news reports about security breaches and hacks, their online experiences with companies and postings on social-media channels. These interactions quickly inform their beliefs about a company’s culture.

Changing and emerging consumers are prioritizing culture, and especially where business culture can positively impact social problems. If you want to understand your customer, especially the changing customer, understand their culture.

What to know about “attracting Millennials”:

  1. They prioritize culture.
  2. They want to enjoy their working experience.
  3. They want open and honest communication.
  4. They want flexibility.

Cyrus Taraporevala, president and chief executive officer of State Street Global Advisors, said, “We believe that at a time of historic disruption, increased focus on corporate culture and how it supports strategy is essential to sustainable, long-term value creation. This is good for investors…and good for our shared prosperity.”

Our world, and especially the financial sector, is desperate for courageous leaders who will inspire future generations by caring for their neighbor and executing strategies that will grow prosperity among more humans to positively impact global issues for generations to come.

Article was originally published in International Banker, Spring 2019 Edition and the International Bankerwebsite on 12 June 2019.

Article was also published in the Corporate Board Member website on 13 June 2019.

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