Amidst Transformation, Workplace Evolutions and Succession Planning, Boards need CHROs More Than Ever
In late 2016 I had the great pleasure of interviewing several dozen of the top CHROs in the US who had been appointed to public company boards. The study, CHROs: An Underutilized Resource for Corporate Boards, was conducted in collaboration with the National Academy of Human Resources (NAHR) and published by HR People and Strategy (HRPS).
In addition to discussions with the CHROs, I was also able to speak to many of the Chairs and Lead Directors of their boards. One of my favorite comments was from a prominent board member, in essence, ‘Now that I’ve seen the contribution that an exceptional CHRO can make at the board level, I want all my future boards to have that resource’. Now might be a very good time! But first, some context thanks to the HRPS study:
An excerpt from CHROs: An Underutilized Resource for Corporate Boards
co-authored by Jeff Hodge
Chief Human Resources Officers (CHROs) represent an untapped resource regarding corporate governance, which could add significant effectiveness to many corporate boards. The strongest CHROs, by virtue of their strategic view of interrelated issues across the breadth of the enterprise and their deep knowledge and understanding of all aspects of talent would add substantially to the dialogue at the board level.
Outstanding CHROs understand all aspects of how companies work and interact, while often being a key, guiding hand when major transformations are taking place involving all manner of change.
Access Original NAHR / HRPS Study
Fast-forward to today, in a recent discussion with Jill Smart, President of the NAHR, it occurred to us that it would be timely for corporate boards to consider adding an exceptional CHRO to their table given both the nature of our current global challenge and the uncertainty of the future.
Jill commented that on her three boards (both private and public) over the last two months she worked with her management teams and her fellow directors regarding the following:
- ‘How do we keep our people safe and support their work remotely.’
- ‘What do we do on pay, health insurance and other programs.’
- ‘What do we do about executive pay and bonus amounts.’
She was able to bring her own experience as the former CHRO at Accenture to help find answers to these questions. Jill mentioned that in her more recent board meetings “The discussions are now more about the ‘new normal’, which won’t be normal at all.” She also noted that the network of CHROs on boards is very actively sharing ideas across many platforms including the NAHR, HRPS and many others. In appointing a CHRO to a board, you’re getting very senior collective wisdom and experience.
Perhaps the key point made in the study was as follows, “Given that boards have most often considered CHROs when there is significant change at their companies, it is not surprising that the people we interviewed often referenced large-scale organizational change and transformation experience as having been very important in their candidate selections.”
The board members I spoke with mentioned strong CHRO board member contributions related to:
- Guidance regarding building new management teams, including significant succession management experience
- Challenging business structure changes
- Implementing significant technology change (and the related organizational and rollout impact)
- Managing complex labor issues
- Demanding executive compensation matters, including implementing major overhauls to executive compensation plans
- Coaching a new CEO
To the above, based on more recent CEO and Board discussions, I would also add:
- Charting the organizational landscape in periods of great uncertainty
Now is the time to bring these experts to the boardroom table.
