A key factor for building high functioning boards that have the ability to lead successful organisations is for the board to have the right systems, processes and supports in place to empower a group of experts to become an expert group.
An effective induction is an essential process that enables directors to be ‘on boarded’ in a timelier fashion, allowing them to contribute their expertise better at the board room table, to feel more confident about their knowledge of the organisation and its risks, and ultimately to improve their ability to govern.
However, our research shows that boards across multiple industries consistently identify effective director induction as a critical gap in their governance processes. While effective induction is actually quite a straightforward process to achieve, many boards are missing the mark, with the result being directors who lack the understanding, expertise, engagement and confidence required to properly govern the organisation.
What does an effective director induction process look like?
An effective induction process provides new directors with information about their role so that they quickly become useful, integrated and satisfied members of the board, and are able to contribute effectively.
It is important that the induction process is relevant to each director’s skillset, and is an engaging process. This is a shared responsibility for imparting and gaining knowledge about governance requirements as well as the organisation and its top risks.
A quality induction process should include a well thought out combination of:
- Knowledge about the director’s skills and experience, with corresponding supports & information: mentoring/buddying, board online systems and supports tailored for their gaps.
- Information about the organisation and director roles, including strategy, services provided, top risks and tolerances, directors’ roles and responsibilities, board processes, governance policies and procedures, board resources and training, as well as tours of the organisation and social events.
- Information about the industry/sector, including key information about the sector and its unique requirements, frameworks, legislations and legal structure
When should the director induction process begin?
Induction should commence in the recruitment stage, before election or appointment, to ensure that directors with the necessary strengths are appointed. The Governance Evaluator Director Development & Skills Matrix is invaluable at this stage in identifying the current skills, experience or cultural gaps on the board that will inform the recruitment process as well as explain the board’s priority areas to potential new directors.
The induction program itself should comprise a stepped process that includes actions before, during and after the first board meeting. New directors should start by completing the Director Development & Skills Matrix and their results should inform key elements of their induction plan prior to commencement on the board. For example, a director may be starting on the board of a healthcare organisation, but their Development & Skills Matrix results show that while they have high finance and legal skills and experience, they have low clinical governance and data analysis skills. This will therefore inform the most suitable director to be their mentor, as well as the educational resources on which they should focus.
Their individual induction action plan would therefore include standard organisation and sector components but also include individually tailored content to help them address their specific development needs to more quickly onboard and contribute. In addition, the process enables new directors to become more aware of their strengths, so they feel more confident to contribute in that area at the board room table.
How long should director induction take?
Being realistic about the time it takes to become familiar with an organisation is important. An effective induction process may take up to 6 months for the initial actions and is important to be ongoing. It should also include regular check ins between the chair, mentor and the new director to ensure they feel welcome, comfortable and confident to contribute. Good practice is to have director induction and check in as a board meeting agenda item.
What steps contribute to an effective induction process?
As outlined in figure 1, an effective induction process consists of often concurrent steps that seek to optimise:
- The culture of the board – promoting a welcoming, collegiate culture that values and appreciates the new director. Achieving this culture will result in directors who are engaged, passionate and have a long tenure.
- The contribution of the director – educating and empowering the new director in relation to the organisation, broader sector and their governance requirements, but also in relation to their own skills and areas for development. Achieving this will result in directors who quickly make a meaningful contribution to the board and continue to improve throughout their tenure.
- Continuous improvement – ongoing evaluation and improvement of the induction process to ensure that future new directors, and the organisation, will benefit.
Fig 1: An effective director induction process. Steps are often concurrent. Read on for more details about each step.
Getting started for your board
As you can see, an effective director induction process is based on understanding the new director’s skills and experience, and working within a health board culture with a commitment to contribution and continuous improvement. The benefits of achieving this from the outset are significant, in terms of director satisfaction, tenure and contribution right from their first board meeting, as well as the effective governance of the organisation.
The Governance Evaluator Director Development Program is the perfect place to begin, as it supports boards to achieve the key characteristics of effective governance, ensuring a consistent and high functioning level of the right skills, experience, and behaviours across all directors.
Our expert conveners support boards to optimise their induction process, and guide directors to build and maintain their Individual Director Development Plans.
Steps to an effective director induction process in further detail
- Welcome*: As soon as possible after the board has confirmed/been notified of the appointment of a new director, the chair sends a welcome and congratulations letter, inclusive of requirements for commencing the induction process prior to participating in the first board meeting.
- Appointment*: The new director signs all relevant contracts, statements and disclosures.
- Introductions*: The chair introduces the new director to existing directors (and senior staff, if appropriate) as soon as possible after their appointment and seeks to involve the director socially in board activities.
- Development & Skills Matrix*: The new director completes a Director Development & Skills Matrix to identify areas of high strength/expertise and areas where development may be required.
- Individual Director Development Plan*: The chair assists the new director in building a tailored development plan to guide their education, training and development priorities throughout their tenure on the board.
- Chair briefing*: The chair takes the new director through the minutes of recent meetings, and briefs them on the issues the board is dealing with at the moment, or will be looking at in the future. The chair also draws the new director’s attention to the roles and responsibilities of the board in general, and the roles and responsibilities they will be expected to undertake as an individual, and discusses any concerns they may have.
- Mentoring*: Based on the results of the Development & Skills Matrix, the chair nominates a more senior member of the board with differing skills and experience to the new director to act as mentor to the new director. The mentor supports the new director in a variety of mutually agreed and scheduled ways, such as taking the new director through board papers, sitting next to the new director in board meetings and regularly checking in by phone or face to face, accompanying the new director on a walk around the organisation. The chair is kept informed throughout the mentoring process.
- Background reading*: The new director is provided with a copy of the organisation’s relevant governance manuals by the chair and/or board support person, which will serve as an initial introduction to the group as well as an ongoing reference. It should include:
- relevant organisational documents such as the mission statement, organisational purpose & strategic plan, constitution/rules
- financial information, including current year-to-date budget, financial position and funding model and the most recent annual report
- services provided by the organisation, their top risks and assurances, and the risk reporting strategy to the board
- introduction to the organisation’s operational and committee structure
- information about the organisation’s social media, newsletter and other communication methods for the new director to subscribe to and/or follow
- information about IT systems and networks used by the board for intra-board communication, with necessary logins
- basic biographical and contact information about board members, and staff (if appropriate)
- basic meeting schedule and board annual calendar
- roles and responsibilities of the board and its directors
- Organisation tour: The chair invites the new director to take a tour of the organisation’s facilities and introduce them to staff, volunteers, members and the beneficiaries of the organisation. The chair and/or board support person also shows the new director where the board meets, and all other general housekeeping requirements, to ensure the new director feels comfortable.
- Induction review: The chair and/or board support person surveys the new director regarding the induction process to identify any potential areas for improvement
- Regular Check-ins: The chair and/or mentor meets with the new director each month for the first 6 months of their tenure to monitor their Individual Director Development Plan, address any issues and ensure they feel engaged and confident to contribute.
*These steps should take place prior to attending the first board meeting.
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