Three things to look for in a successful Non Executive Director

All of us working for a better corporate governance have often been asked such questions as these:

How can we tell who is right for which board?

What are the key competencies that make a newly appointed Non Executive Director succeed?

Of the many talented people we can come across, who will make exceptional Non Executive Directors?

In most cases, the answers will depend on a number of circumstances in the kingdom of Obliquity and Black Swans, i.e. totally unpredictable events. Yet, identifying a candidate for a board search and assessing them against a specific situation can make the likelihood of success significantly higher.

What are the three things we look for in a Non Executive Director candidate?

With the risk of over-simplifying it, I would like to elaborate a bit on the following:

  1. Credibility: no candidate can have positive impact on a Board unless they rapidly build credibility with all relevant stakeholders. Credibility is built through a combination of the candidate’s collaboration and influencing skills, on the one hand, with their “harder”, non-people-related competencies, such as their technical background, their ability to contribute additional market knowledge to the Board and to the strategic orientation of the board itself on the other. Even if a candidate has already exceptional reputation to bring to that Board, they will need to build credibility with all relevant stakeholders, starting with fellow board members. to appreciate and combine the knowledge and experience of individuals with different backgrounds and viewpoints.
  2. Listening & trust building skills: this is an additional and crucial component of a candidate’s ability to succeed on a Board. Listening means, amongst other traits, the ability to suspend one’s agenda and judgement, making room for other people’s thoughts. In the life of a Board, listening means being able to remain silent for long, in order to gather sufficient elements for making up one’s own opinion. Also, listening means being capable of asking proper, effective, most of the time open-ended questions, both during the Board sessions and, even more importantly, between them. Listening implies the ability to wait and select proper timing to act, avoiding the risk of early reactions which may jeopardise long-time effectiveness.
  3. Independence & Integrity: once credibility has been built, through a process which can last from a few seconds in the initial meeting to a longer period of several Board sessions, the Board member will need to be able to use their judgement and speak up, possibly standing against the Board’s prevailing opinion in an effective manner. This is what we call integrity and independence. Being independent requires the ability to influence the Board’s decision making process both ethically and effectively. It requires, amongst other things, the ability to establish effective communication channels with fellow board members and, most importantly, with the Board’s Chairperson.

Credibility, listening & trust-building, independence & integrity are three of many aspects we see when we meet exceptional Non Executive Board Members. They may not be sufficient, yet they represent a strong signal of an emotional intelligent person, most likely to succeed even in a very demanding Board.

“There’s just no excuse”

  • We need to make smart, talent-based, perspective-building decisions about our companies and our boards. We have a very rich talent pool and we have a very real opportunity to build diversity of perspective into the organizational structures of our companies and their boards.

Anne M Mulcahy, The Focus, Egon Zehnder, 2013

I believe the potential of #diverseboards as a change agent remains extraordinary. Ms Mulcahy also adds another crucial point: CEOs need to make it clear that having a diverse board is a priority for them.

In the following short video, an excerpt from a longer, very interesting interview with Egon Zehnder colleagues for which we are grateful, Anne M. Mulcahy, former Chairwoman and CEO of copier manufacturer Xerox, makes a number of interesting points about the opportunity of selecting proper and diverse talent for boards.

I am very grateful to the outstanding talent of so many women who are already changing for the better many of the things we do.

Tommaso Arenare

www.twitter.com/tommaso_arenare

“Never burn a bridge. Ever”

“Never burn a bridge. Ever. This world is small. That bridge will crumble you later if you burn it”.

IMG_2757

This quote from “Stop with the BS” sums up well why I liked reading this book and recommend it: it’s about “relationships” and how we can all benefit from pursuing what we like.

Shane Mac, the author, wrote it on a train ride from Seattle to San Francisco and back, over two days in March 2010.

In my profession, I have been privileged to connect with a large number
of exceptional individuals. With those people, I share thoughts and keep a
constant dialogue on themes I like and consider connected to my satisfaction: leadership, relationship, unconscious misconceptions when talking about “career” and much more.

In reading Shane Mac’s book one gets a feel of refreshing “Gen Y”
approach to life (“Don’t settle”, “Learn, learn, learn”…) and a bit of the
great pleasure of travelling on a train across America.

Tommaso Arenare

www.twitter.com/tommaso_arenare

Not a passing comet star. A couple of reasons to believe in Italy’s (and Professor Monti’s) future

I have thought about the one thing I would post here, this morning, after Prime Minister Monti’s announcing his resignation yesterday evening, a little over a year after he commenced an outstanding work of helping his country and Europe succeed.

I will only post a video, with one comment.

This is the video: Professor Monti speaking in Washington, on 27 September 2012, in front of the Council on Foreign Relations.

This is quintessentially Professor Monti. Most answers people seek are in there. Just watch it. Let me just note, out of the thorough talk, Professor Monti reminding the global audience that

…by the way, Italy will have next year a balanced budget in structural terms,… And we will be one of the first two, hopefully, EU member states to have reached that… very demanding objective, which implies, to give you an idea, that given the huge stock of debt, we will have and we are having year after year some 5 percent of GDP primary surplus.

Professor Monti is a senator for life, not a passing comet star. He also added, last September in Washington, talking about Italy’s future after the elections (now expected for February or March 2013):

I will be there. I will consider.

I will finish with what I tweeted then and a little hope, again from Professor Monti’s speech at the Council on Foreign Relations:

Seven more years of Monti’s leadership, as seven years is the mandate that the Italian Parliament will award to our next President of the Italian Republic.

Against all odds, Italy will make it.

Tommaso Arenare

A time for women


A great day of work in Venice, on 23 November 2012, to discuss how we can all help women flourish and, with them, make Italy and the world a better place. A great “Thank you” to all outstanding participants, who ensured this was a success!

This is the video, in Italian, of of the opening panel, which I had the privilege to lead:

Full video coverage can be found here.

We believe “Tempo di donne” can be one of the many initiatives in support of the outstanding women who are leading Italy and Europe towards better Corporate Governance.

Tommaso Arenare

How about a coffee together?

Shall we meet for a coffee? Or for lunch, even?

So many times are we all faced with those questions. In my profession, as a management consultant focusing on leadership, board and executive search, selecting how to allocate one’s time is a daily as well as a lifetime priority.

I find reading Sarah Peck extremely inspiring. This has been since the first time I came across one of her posts, several months ago. Her “itstartswith.com” is home to a number of very thorough and thought-provoking thoughts. One of Ms Peck’s recent posts, when she first tweeted it, sounded as follows:

Her argument: if I say “yes” to all the requests to meet up face to face, this will disrupt my time, making it hard for me to do what I like. Her argument continued, as follows:

I’d much rather do a phone call. 15-20 minutes, tell me what you need, let’s jam while I walk to my next destination. Better yet, send me all the research you’ve done in an email, let me skim it, and specify exactly what you want in clear language and how I can help you. If you tell me what to do, I can help.

My immediate reaction was agreement with how Ms Peck described the challenge (how do I say “no” when needed), in combination with a radically different additional point: more than just learning how to say “no”, our real challenge is learning when and how to say “yes” to that coffee.

Face to face interaction can be so much more effective in establishing trust and building relationship. This, however, on condition that we connect with people wisely. Hence, in a number of occasions, a face to face coffee would end up to be so much more fruitful than a 20 minute call or an email. The tricky aspect, though, is how to detect those instances. I have already written separately that someone living their life in professional services, since their mid thirties, is more likely to have known, in the broadest sense of the meaning, between four and in some cases as many as ten thousand people (think about all the people you’ve known during your school life, then the university, then your colleagues at work…). We live a life of overexposure to connecting, not the opposite.

Let me share three thoughts about how I try to decide when it’s time for that coffee:

  • We might have connected with those people asking for a coffee, as it happens most often, through someone else we trust and who likes them. People may ask to see me as they seek advice, or want to share advice, as well as thoughts and opportunities, as a result of someone else we trust who addressed them to me. In other words, someone else has acted as indirect builder of a bridge of trust towards us. Most often, this gives more than a reasonable chance that the relationship of trust we enjoy with that former person can easily be transferred to the latter person asking for a coffee. If this is the case, this opens up the possibility of building a new and fruitful relationship which will give excellent results and satisfaction over time. Hence, let’s find proper quality time and have that coffee;
  • Alternatively, we might have good feelings about them, for what they have said, for what we have listened from them. This is more difficult, as there is no bridge-building of trust. Moreover, this requires us to be able to listen to our counterpart, leaving proper room for them to express their needs and feeling. This is lot more difficult than in the previous case. Our ability to listen can be practised and trained but it requires time, effort and willingness. Not least, we are exposed to the risk of making significant mistakes;
  • Finally, though, there’s a more general, and much more difficult point. How good are we at listening to ourselves and understanding whom we like? What we need is full awareness of what and whom we like and what and whom we don’t. This may require a thorough introspection, years of psychoanalytical work or else. I have written a number of times about how we need to increase awareness of our choices and our inner feelings. This can only be earned individually, through our own introspective work over time.

In all cases, there’s a combination of leveraging on existing trust, as well as on the ability to listen to others, and finally, but most importantly, the ability of listening to ourselves and to whom makes us happy.

There’s a lot, indeed, before sharing that coffee.

Tommaso Arenare

This is about just three tweets

My first year on Twitter, what a wonderful experience…

I will share three tweets, out of about 700, an average of almost two per day.

I have devoted an entire post to my first tweet, hence I can avoid to start from it here.

On 4 December 2011, Prime Minister Monti had been in the role for less than 20 days. He held his first press conference in the role, highlighting the Italian Government’s initial emergency measures to be put in place. We will remember this as a milestone moment in the history of the European Union, Italy will remain grateful to Professor Monti’s courage and dedication. I like to remember that “only the brave” would then feel that “Italy would make it”:

Rita Levi Montalcini, a Nobel laureate and a pioneer of #diversity, is an Italian lady that makes us all proud. She escaped from fascism, returned, won the nobel prize, was appointed senator for life, turned one hundred and three on 22 April.

Celebrating her is also celebrating a phenomenal year for Italy (and possibly for Europe) in enhancing gender diversity at board level and establishing new best practice in corporate governance.

We will need female talent and leadership ever more. Here’s my tweet on Rita Levi Montalcini:

It’s difficult to limit the focus to three tweets out of almost seven hundred.

History happened, initially rather unnoticed, on 26 July. The Mario Draghi speech on “whatever it takes” deserves a full read, in its original version.

This is a moment when a larger than ever number of people realised that the Euro zone is already a political entity and that it is here to stay. #moreEurope:

Tommaso Arenare

Only the brave

Erik F Nielsen is Global Chief Economist of Unicredit, one of continental Europe’s leading banks. Prior to that, he had been Chief European Economist at Goldman Sachs, for several years. That was the job he held when I first met him, in 2011.

I have always admired Erik’s ability to see through the fog, his being brave in his well-rooted capacity to read people and their behaviour.

For a second, let’s go back to the situation in Europe a year ago. On 10 October 2011, Moody’s and Fitch had cut Italy’s rating heavily (Moody’s by three notches to A plus – yet higher than today’s…). Erik pointed this out, but then clearly argued:

“But sometimes the market gets it all wrong, as is the case now.”

Hence, his argument continued, Italy’s debt was a much safer bet than others, such as the UK’s triple A. Italy would get things done and make it.

Erik gave me the occasion for my first tweet ever, on that very day:

Almost a year (and many hundred tweets) later, Professor Monti, Italy’s Prime Minister, could speak at the Council on Foreign Relations, on 27 September, pointing out that

…by the way, Italy will have next year a balanced budget in structural terms,… And we will be one of the first two, hopefully, EU member states to have reached that… very demanding objective, which implies, to give you an idea, that given the huge stock of debt, we will have and we are having year after year some 5 percent of GDP primary surplus.

Only the brave (as Erik Nielsen, Professor Monti and, luckily, many others with them) could have seen all this, a year or so ago.

I will finish with another tweet and a little hope, again from Professor Monti’s speech at the Council on Foreign Relations:

Seven more years of Monti’s leadership, as seven years is the mandate that the Italian Parliament will award to our next President of the Italian Republic.

Only the brave…

Tommaso Arenare

Wrong brain, wrong education and that little nudge to help

As a fact, in the US listed companies, about 15 board members out of 100 are women.

As another fact, the US has historically rewarded merit and competencies more than many other countries.

How can then happen that in selecting people, one of life’s most crucial choices, we are so biased as to unconsciously neglect merit and competencies?

Breaking the impasse is possible, if we try to tweak some consequences of two unconscious biases through a little nudge.

Similarity bias happens when we select people that are more similar to us, as opposed to people who appear more different. Evolution has fostered this trait, as a key manner to survive ever since the difficult times when we would live in the savannah, trying to escape from animals and all sorts of dangers.

We have the wrong brain and the wrong education. When making people decisions, we fall pray into a series of unconscious psychological biases, such as surrounding ourselves with similar people with whom we feel naturally comfortable. Many of these biases were very effective for our primitive ancestors, but they are no longer useful for building great teams which require complementary and highly sophisticated skills.

Claudio Fernández-Aráoz, Author of Great PeopleDecisions, 2007

A “similarity bias” results when individuals are more likely to imitate cultural models that are perceived as being similar to the individual, based on specific traits (such, for instance, age, gender, geographical location and so on…).

Similarity bias is even enhanced by our other bias, which we call snap judgement, whereby we unconsciously make up our mind on someone during the first milliseconds after we meet. I have separately written about the many benefits of overcoming snap judgements.

The combination of snap judgements and similarity biases is the one reason why gender diversity (but also age diversity, geographic diversity and possibly many other aspects of diversity) is so difficult to happen without a little nudge (such as that of a proper law).

That little nudge lets us overcome unconscious fears, to the advantage of merit, competencies and corporate governance.

Tommaso Arenare