Visiting the frontline

High-performing boards are well informed boards. Robyn Weatherley believes that getting out of the boardroom to see your organisation’s operations is a must for every director.

The calendar demands on today’s directors, particularly on those holding multiple appointments, is much greater than at any time in the past. And, given the regulatory, governance and community expectations of directors, this situation is unlikely to wind back anytime soon.

Given the workload of many directors, the suggestion to throw additional, seemingly elective tasks into already stretched board calendars may not be met with the greatest of support or enthusiasm.

However, one particular task should never be neglected.

Visiting the businesses for which your board holds ultimate governance responsibility and accountability can be one of the greatest time investments you will make as a director and should not be undervalued in the context of other activities built into the board’s yearly calendar.

Getting out of the boardroom and onto the frontline of the organisation is essential for directors to get a one-on-one, personal understanding and direct appreciation of the conditions under which employees are working and the tone or culture on the floor. It is also an opportunity to ask questions of staff who would otherwise remain an untapped information source.

This activity should not be limited only to newbies of the board. It should also be undertaken by the full board, supported by the company secretariat, CEO and executive teams.

Like any good governance practice, this exercise must be customised to each board and each organisation’s circumstances – what might be appropriate for a global, complex company operating in numerous countries with tens of thousands of employees might not be the right approach for a domestic, horizontally integrated operation.

Even for strongly governed, very large companies domiciled in our own geographic backyard, the effort and logistics required to visit the sites of a disparate business group may seem a time consuming and costly task. But it doesn’t have to be if some of the business can easily be accessed or experienced by the director as part of day-to-day life (for example, ducking down to Coles or Bunnings).

Turning up on the doorstep of the business and seeing it with your own eyes can provide you with rich and direct evidence on how a business is running and insight into major issues in play that may not be finding their way into your regular board reports.

The benefits of scheduling in regular visits to parts of the business are many and include:

• Meeting the staff: Not only can it be a tremendous confidence boost for staff to receive directors at their premises, it also provides the board with an invaluable opportunity to ask employees questions about their experience working in the business, as well as how they see the company’s challenges and opportunities unfolding. On-the-ground interactions can have a big impact on directors and staff, and may contribute to outcomes and reflections not otherwise available.
• Seeing how stuff is made: It can be incredibly educational for directors to see how the company’s goods or services are made, created, shipped, extracted, designed, transported or stored. These observations may educate them on local traditions and customs, and provide inspiring insights that could never truly be conveyed by even the most descriptive board report.
• Observing the “mood”: Visiting the premises can provide a director with a sense of how ordered, productive, collegiate or dynamic the company’s business is (or appears to be). How does the staff appear to work together? Is there a sense of camaraderie and pride in the product or service being provided? Do the premises look respected or is it an abhorrent mess? Is there an obvious ambience and what is it telling you?
• Connecting the dots: Sometimes, visiting very distinct parts of the business (operationally, geographically or culturally) can help directors more acutely understand (or see in action) the intended vision of the organisation. You might have operations in multiple countries, making various products for vastly different markets, but if you never set foot into at least some of those businesses at some time during your tenure, how else can you apply an informed lens across the information routinely received in your board pack or beyond that to be found on Google? In integrated businesses, this may help you critically observe how one division, capability or product merges into or informs the next in the chain. This may deepen your understanding of any interdependencies which exist between the layers of the business, often a difficult task if you are a non-executive director of a company in a complex industry, and in which you have had no prior executive experience.
• Observing safety in action: This can be achieved through pure observation (for example, going to the mine, seeing how maintenance is performed, understanding how the safety audits are carried out, and so on), discussions with staff and comparing those outputs received via board reporting. This can be a powerful activity for directors, particularly in industries where human life is routinely put at risk due to the nature of the business.
• Confidence for investors: A visit to your business should reflect well in the investor community. Having physically visited the operations will also strengthen a director’s ability to speak on a more informed basis to investors, customers, suppliers and community stakeholders. It also reflects the board’s commitment to, and investment in, what is an extremely important stewardship role for the company, employees and the community.

For boards overseeing a vast number of locations or types of businesses, it may be seen as physically demanding, excessive or costly to visit sites regularly enough to obtain the benefits above.

However, boards can address this in a number of ways. For multi-country organisations, consider carving up the locations to visit each year, and either take a rotational approach, or send just three or four directors at a time. Smaller groups can report back on their experience to the full board on their return (this may be done either with or without the executive team and the CEO being present).

If you have a particularly large board, smaller groups have the advantage of greater flexibility when arranging the logistics of the visit, as well as the obvious cost savings.

For some companies, taking the entire board to certain countries may also spike unwelcome local attention, putting directors at a heightened security risk.

There is also the potential of an accident wiping out the entire board if travelling as one unit.

Travelling with smaller numbers may sometimes provide a more agile experience for visiting directors, wherein the ability to speak with staff, locals or suppliers is more easily facilitated than if the entire board congregates en masse.

Sceptics of onsite visits may point to the potential false sense of security arising for directors who may walk into situations where their attendance has been strategically communicated and planned well in advance or where only the most talented, well-spoken or informed employees are presented.

It could also be that the visit takes place at the best organised and cleanest location or where staff morale is strongest etcetera.

However, to dispel the idea entirely is to undermine the intelligence, experience, insight capability and role of directors. Most directors at some time will have been executives in a business and would be attuned to the potential that only the very best personnel have been selected for interactions.

In reality, a director’s executive experience should serve to put him or her on notice as to the possibility of a staged visit or cover up, and to observe and reflect on this accordingly.

Partaking in visits to an organisation’s business premises should be a highly rewarding activity. It provides not only a humanising element to the portfolio of businesses making up an organisation, but it also provides directors with the opportunity to observe and learn, listen and query, reflect and deliberate.

For some directors, this task may be undertaken more often and more easily than for others — for example, if your board is governing retail businesses such as Bunnings, Myer or Woolworths.

However, if your organisation operates in cyber space, the depths of the Amazon or relies on being hundreds of metres below the earth, then it is a different story.