Over recent months and years there have been several examples of the damage to a company’s brand/reputation and individual directors’ reputation. The destruction of brand value of Qantas is significant, and along with it the reputation of its former CEO and some members of the board. Then there’s the ongoing PwC tax scandal that resulted in the writedown and sale of the consulting business for $1. The rebranded entity, Scyne, is a risky and ambitious plan of corporate reputation rebuilding. Then there’s the ongoing fallout from the Richard White/ WiseTech Global revelations and Chris Eilison from MinRes.
There’s never been a more challenging time to take on a board role. Board directors’ responsibilities in terms of their legal and compliance requirements are very clearly set out in the Corporations Act and other regulatory and legislative requirements. Accountability to these is always increasing.
But it’s often not the legal and regulatory requirements that create the biggest challenges for board directors. Two key aspects of directorships are your reputation and relevance at a point in time and over time. Let’s explore each of these.
Your reputation as a board director
There’s a trust deficit across almost all areas of society at the moment. You don’t need to look far to see the consequences of this. The US Presidential election springs to mind, as does the more recent action by the ACCC against Coles and Woolworths around their discounting practices. Then we have the now former Minister for the NDIS announcing a crackdown on fraud within the system that has blown out to astronomic levels within just 10 years.
As a board director you can’t simply hide behind your Chairman or a spokesperson. This didn’t work for Qantas board members and nor should it.
Your personal reputation and what and how you wish to be seen and positioned is a creation of your own doing. It is built up over your lifetime and can take just a moment or two to lose. It’s a combination of factors, famously described as ‘it’s what others say about you when you are not in the room’.
Here’s some questions you need to ask yourself.
Do you really understand what your reputation is right now?
How do you actively manage your reputation?
Have you given any thought to the values of the companies you are seeking a board position with?
What would you do to manage your reputation as a board director in a situation where the CEO/senior executive or fellow board member has not followed the company’s code of conduct, breached their director’s duties, been involved with fraud, dishonest dealings or worse.
If you are not clear on the answers to these questions, it could explain why you are not getting the board roles you are seeking. Do you know what you can do to change it if you need to?
Your relevance as a board director
Part of your brand is your relevance. This is quite separate from being recognised. You can be recognised (at events, in meetings, in the media) but not relevant. Media coverage (recognition) is not the same as relevance.
Your relevance is a more challenging concept as it’s constantly moving. You can be highly relevant in one role – executive or board – but not that relevant in or for another. When moving from an executive position into the board network, your executive experience while useful and important is NOT as relevant as you might think. The roles and responsibilities of a director are quite different from an executive, as are the legal consequences of getting things wrong. You might think you know about what a director does as you’ve probably worked with and reported to many of them.
In addition, you need to consider the relevance of your skill set (or not) on the board. Most boards are now developed based around a combination of knowledge and skills across the board members.
Separately, the rapid pace of change and radical uncertainty that exists around the world right now means you need to be across a wide range of topics, trends and events. Some questions to ask yourself about your relevance include:
How up-to-speed are you on AI, ChatGPT, data analytics and where your next/new competitor is going to come from?
Have you undertaken real and thorough training on how to use the various AI tools available, as opposed to scanning articles so you can get across the acronyms?
How many of you have really considered the implications of generative AI for your business? I’m not talking about a contained digital transformation project but rather a total business transformation.
How far have you explored the cost, options and realities of hitting your net zero targets? What potential threats a shortage of electricity supply could have on your business operations and profitability through the renewables transition?
Insight is essential, foresight is rare.
Your relevance now and in the near future will be based around your insight and foresight into these and other trends.
If you want to be a board leader of the future, it’s time to take active steps to manage your board reputation.
The first step is to undertake a personal brand audit with a trusted mentor. There’s that word again, TRUST. We’re all seeking it, surrounded by examples of where it has been damaged or broken, but it’s something we must have if we are to build stronger relationships and businesses that can thrive.