Fill a room with highly performing directors, and the possibilities are endless. Fill a room with highly performing directors plus their extensive network, then just imagine what can be accomplished.
Connections have always been an effective way of finding, and hopefully getting, what one is searching for. And with the digital power of social media, such as LinkedIn, that old Rolodex is pumped up by a thousand. Within a board, if everyone has a good social network, it can be very beneficial to use these contacts once and again.
As written in an article by Huffington Post, the importance of networking is essential for always advancing. It may be about enhancing company performance or business strategy. Either way, there is no downside to having executives who know the right people (what is so-called having a networked board).
Intimidating and time-consuming, but can bring high results
Let’s face it. Most of the global population dislikes networking. It takes time and can be awkward, making it less appealing than staying home and resting for an evening. But the beneficial factors a good, growing network can bring are often higher than that one extra hour of evening downtime.
Better professionally networked executives are likely to have a competitive advantage as they have access to more information, making them better aware and able to make better comparisons, leaving room for company growth performance.
In the British Journal of Management, a published study suggests that companies even rely on the board members becoming information “agents”, using professional networking to enhance business performance and bring more angles and perspectives to the table. Reputably, it works to the extent that some even suggest that a better-connected executive should have higher compensation.
No, don’t hire your friends
One thing that is commonly said is “don’t mix business with family”. So how about friends? Well, there are negative aspects to consider. Holding anyone responsible can be challenging, even more so when it is someone close to you. There is also the fact that promoting (or onboarding) a close friend can make them feel unworthy, while others in the company are discouraged by perceived unfairness.
Professional networking is not about nepotism. There are plenty of reasons not to hire your friends. A networked company composition is different than a cocktail event at a friend’s house. Just as at a networking event, a better-networked board is about the exchange of professional ideas and views. The more people an executive comes across, the more new angles and perspectives they get.
Better Environment performance in networked boards
It is not only business growth that can be enhanced when board members have a large network. As for environmental performance within a company that has a networked board, research has suggested that having a team of networked executives shows a stronger performance within social responsibility.
In a study published by Journal of Business Ethics, it is found that companies run by better-networked boards have lower GHG emissions. The results were explained by better-networked board members having access to better information, also leading to economically and socially meaningful business effects.