How Boards Can Improve the Onboarding Process for New Members

Nicholas J Price
6 min read
The onboarding process for new board directors really begins with the orientation. The onboarding process is an ongoing board education process that continues until the new board director feels confident and comfortable enough to participate in board of directors' meetings on an equal level with other board directors.

The board of directors should expect new directors to have somewhat of a learning curve, even if they have prior board or industry experience. The faster they get up to speed, the faster they become a contributing board director and the faster the board will benefit from their contributions. Boards that give orientation and onboarding a little extra focus and energy will net a payoff in board productivity.

Customizing the Formal Orientation Plan

One of the mistakes that many boards make is to set up a rubber-stamped orientation program and let new board directors find their way on their own once they've been selected. Formal orientation plans aren't always enough on their own. In some cases, they may not be adequate to fully prepare a new director for board duties.

Boards may find that it's better to take a customized approach to board director orientation and onboarding than to put a program together that lacks focus and meaning for those involved. Every new board director brings different backgrounds and experiences with them, which makes their needs during the onboarding process as unique as they are.

New board directors should have some input on the role they will play within the board of directors and on committees. An innovative approach is for the new director to be more intrinsically involved in the onboarding process by making the process more of a joint effort and taking on some of the responsibility for their own onboarding plan.

Whether boards take a structured, formal approach or a less formal, customized approach, they should work with new directors on the best way to help them get onboarded and start building a foundation for getting involved in strategic planning and oversight.

It helps to break down orientation and onboarding into three basic elements — self-study, initial orientation, and follow-up and onboarding.

Three Steps to Onboarding New Board Directors

Before they ever set foot in the boardroom, there is much for board directors to study and learn about the corporation and their new role as board director. Even if the new director has prior board experience, their experience on this board will certainly be different than their experience on the others. Directors have long said, "If you've seen one board, you've seen one board." New directors and those who work to orient and onboard them should keep this sentiment in mind as they work through the process. A McKinsey report shows that boards struggle more with processes than with dynamics, so this is a good area to emphasize during onboarding.

First, it's fair for a board of directors to run through much of the basic governance materials at an orientation and to ask directors to read the documents more carefully at their leisure. Perhaps a better approach is to provide materials to new directors before the orientation and ask them to read them ahead of time, so they can ask related questions during the orientation. Some companies find that it's prudent to provide such materials before board appointments, so that new directors can get a bit ahead of the board education process.

At a minimum, boards should provide the following documents to new directors, so they can familiarize themselves with them:
  • SEC filings
  • Earnings releases
  • Minutes from past board and committee meetings
  • Overview of committees, chairs and members
  • Strategic plan
  • Third-party assessments, analyst reports, vulnerability studies and activist communications
  • Organizational chart, bios of board and leadership, succession plans
  • Reports or other assessments on branding, reputation and culture
  • Reports on compliance programs, as well as any investigations or litigation
  • Bylaws, committee charters, description of D&O insurance, key policies
It will take new board directors time to read through these documents. Leave them plenty of time to review the materials before holding a question-and-answer session.

Orientation and Onboarding: Length and Formality Vary

Second, provide information about the business end of things. One of the tools that new board directors will use most often is their board handbook. This is another one of the materials that will take new directors some time to review.

The board handbook should contain organizational information, including the board meeting schedule; contact information for board directors and C-suite executives; and the descriptions for board directors and other key individuals. It's also nice to include some promotional material about the organization, including a one-pager on the corporation's history.

Provide new board directors with the last few copies of all board meetings and minutes of committee meetings on which they will be serving. Also, include a copy of the approved budget and the most recent audited financial statement. Corporations that use a board management system will have all of these materials in one, convenient online system, such as those provided within Diligent's Governance Cloud.

The second step of the orientation and onboarding process should include much information about the business and how it operates. Provide board education with information on the company's products and services, customers and main competitors. Share the short- and long-term goals for the company, as well as the company's overall financial status. This portion of the onboarding process should include information on risk management and corporate culture, and provide an understanding of the relationships between the board of directors and management. New board directors should be clear on how their roles differ from those of managers.

New board directors will benefit from a tour of the facilities and from being introduced to key people who work in operations.

Create Opportunities for Quality Discussion With Key People

Third, new board directors will be networking with a great many individuals, especially those who comprise the C-suite. How boards handle the initial introductions will set the stage for future networking. Boards have much flexibility on how to approach the process of new directors getting acquainted with the CEO, CFO, CIO, CSO, General Counsel, Corporate Secretary and others. One or more executives may make a formal presentation at an orientation. Board directors may appreciate a new director's initiative if they opt to request one-on-one meetings with C-suite members.

Some corporations favor the idea of matching a new director with a mentor or board buddy. New directors may feel more comfortable asking questions when they can count on a specific individual to answer them. The mentor may be the person who trains the new director how to navigate the board portal.

Most of all, boards should help new directors to feel as welcome as possible. Host a small welcome reception. Write a press release announcing their addition to the board. It's sure to spark their enthusiasm and encourage them to put their best foot forward.

Finally, once new board directors get settled in, ask for feedback on their board education process. Moving forward, boards should tweak the normal protocol for the most effective outcomes.