The Cause: Nominating a known quantity is often the path of least resistance taken by boards and Nominating Committees. This approach requires less effort in terms of process and time, and the new appointee normally fits well within the existing boardroom culture. However, while sometimes “who you know” may be the perfect fit for the board, more often than not they are less than perfect for the leadership of the coop. One effect of this may be a lack of diversity on the board-lack of depth and breadth of diversity risks deliberations being less complete than they might be which can result in less than wise decisions being made. A further effect may be that your board lacks the skills and experience needed to effectively oversee the co-operative. Ideally, directors should have experience overseeing an organization of at least the same size, scope and complexity of the co-operative they are directors of. And, there should be a diversity of skills and thought around the table-skills like in finance, human resources, risk oversight, industry, etc. If your board has a habit of basing their decision on who gets nominated to the board by using the “who you know” method primarily, more likely than not, the board renewal process you are using may be either outdated, underutilized, not comprehensive enough, not outlined specifically enough in the Nominating Committee workplan, or ignored. Further, the Nominating Committee[1] may not fully understand their roles, responsibilities, or the expectations being placed on them.
Potential Solutions:
- Put your best people on the “board renewal” job![2]
- * Carefully select a strong, objective director to Chair the Nominating Committee, someone with time, commitment and skill;
- * Ensure clear terms of the reference for the Nominating Committee followed by a detailed, timed workplan that aligns to those terms of reference;
- * Provide a strong orientation program to new committee members on the roles, responsibilities, processes, expectations, and importance of the committee;
- * Undertake a robust skills profiling exercise to determine the needs of the organization vis-à-vis the skills and experience of the existing directors;
- * Make sure the profiles are aligned with the organization’s strategic direction and plan;
- * Recruit director candidates that have skills and experience in areas where there are gaps; and
* When possible, deepen the talent pool by using an outside search firm such as Real Board Solutions and consider “out of the box” candidates from new director lists.
