I work with boards of directors on a number of issues. Issues like oversight, compliance, planning, succession and compensation mostly dominate that work. However, there is one area that most boards ignore – the role of the board in development, coaching, and retention of top talent.
Customarily, corporate boards of directors have the responsibility to shareholders to hold the CEO accountable for the performance of the company they govern. Board meetings focus on the most important issues faced by the company and to the assessment of the performance of the CEO and corporate management. Succession Committees address the issue of leadership assessment and leadership development at the highest levels of corporate management and board leadership.
With ‘baby boomers’ leaving the workforce and taking their experience with them, boards have a responsibility to face the challenge of talent drain from their workforce. Top corporate management and board governance can no longer be the only talent issues addressed by leadership development strategies. Boards can effectively combat talent drain by establishing a core group of superior management talent as an advisory board to conduct assessments of management talent at all levels of the company. This same advisory board can work with the corporate board or committee to develop coaching strategies to develop high achievers at every step of the corporate ladder.
Coaching should go well beyond leadership development seminars. A leadership development seminar is great strategy to offer an intensive week of leadership training, but coaching a personal level. Highly effective leaders support the personal growth and development of managers identified as potential leaders with the capability to lead at the next level. Corporate management should be involved with developing their replacements.
A system of coaching younger talent will develop leadership for tomorrow, but it will also produce the best performance at all levels of the organization today. A young, aggressive leader will take the support offered by a successful executive as a great opportunity for recognition and promotion. Retention of young managers with strong potential improves when senior management actively supports their personal growth. Coaching younger managers to excel at their jobs will also equip them with the skills to advance and be successful at the next step in their career. Boards need to encourage corporate excellence at every level and coaching is an effective strategy to achieve high performance from the CEO to the line manager.
Corporate boards have traditionally held senior management development as a guiding principal for advancing the corporate strategic plan. The introduction of Sarbanes-Oxley has focused board’s attention on regulation and compliance management issues and less on strategy. With talent draining away at an ever-increasing pace, boards can no longer focus leadership development strategies solely at the highest echelons of corporate management while returning to the board’s critical mission of strategically planning leadership development – to include talent development at all levels of the company.
The professional governance of corporate boards involves delegation of duties. Compliance with regulations is obviously important. However, regulation compliance issues cannot be all consuming. Boards of directors principal responsibility is protecting and extending shareholder value – not complying with regulations. Compliance management in necessary, but good governance practices allow boards to develop committees of independent corporate directors to hold the CEO and corporate management accountable for compliance management freeing the board up for its primary job of developing strategies, for leadership development that will maximize shareholder value.
Coaching talent has proven an effective performance enhancing method for senior leadership. Boards with the goal of seeing effective, motivated managers at all levels of the company can employ coaching tactics that will retain the best talent and future leadership for tomorrow and achieve results that will return dividends to stockholders today.
One of my coaching engagements started with leadership coaching for the CEO. She contacted me and we were able to reach agreement on a program designed to improve her skills and effectiveness as a leader. However, when we began to discuss the company and its culture, it quickly became evident that most of the senior management team experienced her challenges. The corporate culture militated against the development of effective leaders. It also seemed to militate against retention of up and coming talent. The condition was so pervasive that we organized a retreat for the board and senior team. Prior to the retreat, I organized both a company-wide leadership assessment and organizational assessment. The results were stunning. The dominant corporate culture was operating against the best interests of the shareholders and the employees – its corrosive effects were virtually guaranteeing that the company would continue on a downward spiral that has just starter to become evident.
Based on the decisions made at the retreat, we designed and implemented a company-wide leadership-coaching program. The results were dramatic. Two executives who were actively looking elsewhere changed their minds and decided to stay with the company. The retention rate increased significantly within the first six months. Coaching was able to change the corporate culture and dramatically improve the company’s fortunes.
© Dr. Earl R. Smith II