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- Management is not always looking for new directors to dominate conversations with their domain expertise. Instead, the focus should be on building a deep understanding of the business.
- Fast-track cultural alignment by meeting with the senior leadership team as quickly as possible, ideally before you sign on, but certainly soon after.
- Once in the room, ensure you don’t talk too much too soon – and lay off the heavy compliance focus early on.
For a newly appointed director, the traditional corporate grace period is a myth. While management textbooks talk about the critical first three months, the reality of governance is far less forgiving. Most directors aren’t judged in their first 90 days, they’re judged in their first 90 hours.
When Arlene Tansey FAICD attended her very first board meeting in the mid-1990s, she was full of enthusiasm and dived in headfirst. In retrospect, she realises that may not have been the best approach.
“The shift from executive to board director was more of a shift than I realised at the time. There’s a natural tendency to want to contribute with your strong domain expertise, but that’s not always what the management or board needs or is looking for,” she says.
“If I had it to do again, I’d spend the first couple of meetings watching and listening before I started to contribute. I’d also take certain adjectives out of my speech. I wouldn’t say ‘You should do this’ or ‘I’ve done it this way and it didn’t work.’ I’d find another way to make my point.”
Here are seven ways new directors can build credibility in those critical first meetings – and common missteps to avoid.
Tip 1: Meet the key people
“Make sure you have met with the chair and CEO before joining the board to ensure there’s a high degree of cultural alignment,” says Bruce Cowley AM FAICD, who took up his first role on a board at MinterEllison in 1993.
“I’d also make sure I met all the senior leadership team as quickly as possible, if not before joining the board, then soon after. It will probably be a matter of judgement as to when you meet other key stakeholders, such as suppliers, customers and regulators. I’d recommend taking guidance from the chair about that,” says Cowley, who is a member of the board of trustees of the Australian Retirement Trust, a director of the South Bank Corporation and the Sunshine Coast Hospital and Health Service, and chair of the Queensland Trust for Nature.
Tip 2: Come prepared
“I’d certainly review recent board papers,” says Cowley. “It makes it much easier to hit the ground running if you know what important issues the board has been discussing.
He adds that ideally, board papers will be provided as part of a comprehensive induction pack. This should include a range of information about the company, including a copy of its constitution, the most recent annual report, organisation chart, code of conduct, board and committee charters.
“It may be something of a red flag if a comprehensive induction pack is not provided to you,” says Cowley, recipient of AICD Gold Medal in Queensland for services to governance in 2021.
Tansey recommends reading beyond the board papers.
“If you’ve been connected to the secretary or the company legal secretary before you’ve started, you can reach out to them,” she says.
“You could also reach out to investor relations and ask for some copies of the latest broker reports if it’s a publicly listed company, or do some industry research.”
Tip 3: Do your due diligence
“It’s incredibly important to gain an appreciation of the industry the company operates in, how it’s performing, major challenges it’s confronting and what issues the board is considering at the time,” says Cowley.
Understanding the financial position of the company is critical to ensure you’re not starting on a board at a company facing solvency challenges.
“Make sure you look closely at cash flow projections because they’re likely to provide you with the best information about any financial difficulties. Also, do whatever due diligence you can about the culture of the board and the company,” says Cowley.
“You can probably get some guidance from talking to the chair and the CEO, but that won’t necessarily be definitive, especially if they’re the problem! Talk to other directors and source whatever information you can.”
Tip 4: Pick up on the unwritten rules you won’t find in the induction pack
A common misstep for new directors is to talk too much and too soon.
“It’s also common for a new director to say too much about themselves and their experience, and start moving into management’s detail,” says Tansey.
“If you don’t read the room, you may very quickly find yourself sidelined. Every board will have its own culture – and missing that culture early on can be hard to recover from.”
She emphasises that when you’re ready to say something, make sure you’re adding something. If someone says something and you agree with it, there is little value in stating aloud that you agree, before re-explaining it.
By contrast, aim to think of a question that will sharpen people’s thinking.
“If you see a risk that hasn’t been named around say, an acquisition, you can phrase it as something like, ‘I’m very curious, is there a risk around the integration of some of the executives in the company we’re acquiring?’ Or whatever the case may be. But it needs to be a genuine inquiry rather than trying to direct management.”
Tip 5: Don’t focus too heavily on compliance
“I see some new directors focus excessively on compliance and detailed reporting at the expense of strategic thinking,” says Samantha Martin-Williams FAICD, chair of Ausfilm and Newcastle Airport.
“While fiduciary and regulatory responsibilities are critical, boards create the greatest value when discussions remain anchored in strategy, long-term sustainability, organisational capability and emerging risk.”
She says strong directors remain focused on oversight, strategic direction, culture, risk and long-term value creation, rather than drifting into operational detail or management execution. They understand the distinction between governance and management.
Tip 6: Be collegiate
She also looks closely at how a new director balances independence with collegiality.
“High-performing boards require robust debate and constructive challenge, but equally require respect, emotional intelligence and an ability to work collaboratively towards shared outcomes,” says Martin-Williams.
“Directors who can challenge appropriately while maintaining trust and alignment tend to establish credibility very quickly.”
Before asserting strong positions, it is critical to listen and observe.
“Effective directors take time to understand the business, board culture, stakeholder environment and decision-making dynamics,” she adds.
A common misstep is failing to appreciate the importance of board relationships and culture.
“Technical expertise alone does not make an effective director. The ability to contribute constructively, navigate differing perspectives and build trusted relationships around the table is equally important,” says Martin-Williams.
Tip 7. Exercise good judgement, above all else
“The strongest early indicator of success is good judgement,” says Martin-Williams.
“Effective directors demonstrate an ability to absorb information quickly, distinguish between strategic and operational matters, and contribute constructively without feeling compelled to dominate discussion.”
“The directors who integrate most successfully into a board environment are invariably well prepared, intellectually curious and commercially astute. They ask considered questions, listen carefully and seek to understand the organisation, its stakeholders and the board dynamics before seeking to influence outcomes.”
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