Though it might be considered as uncommon, occasionally a board member will no longer be a fit for his or her tasks. And though it may seem simple to complete one’s service, it’s not only to up and leave when one is done. There is normally much effort put into onboarding, equal part should be done when offboarding.
Recently, a hot topic in the world of corporate governance has been to diversify the boardroom. Though this is on many agendas, the length of board service and retirement can be a touchy subject. It shouldn’t have to be as board renewal is a healthy procedure and will do good for business and governance. However, when giving the boardroom a facelift two things need to be considered, keeping the confidentiality of the board and keeping the exiting board member at ease.
How to offboard after a long stay of board members
Though some companies have a set period that a board member can serve for, it is likely that many are re-elected and staying on for plenty of years. Seeing as the average board member is 63.1 years old (source: Spencer Stuart Board Index, 2017) and that the usual retirement has been risen to the age of 75, this is no secret.
In an article published by the Huffington Post it is said that the best time for a board member to leave his o her position is when the become irrelevant to the board agenda questions. They may not bring any new opinions, do not take the time needed for the mission or might be outdated in their way of thinking. One simple rule to go by is: when a director puts their own interest before the company’s, that’s when it’s time to leave.
Though there are reasons for relationships to go sour when a member is leaving, willingly or unwillingly, and bad blood can be detected between the two parties. This shouldn’t have to be the case. The balance between congratulating on new adventures and keeping information safe and confidential can be found and should be a priority within groups of directors.
The best possible offboarding regarding board confidentiality
Directors leaving can cause issues, and it is best for a company to have the exit as properly planned as possible. Prior to a parting member leaving the board, there are not only documents to sign in terms of liability. What should also be considered is having a “separation checklist” to ensure all information needed stays within the board.
Because a board member is not a regular employee of a company, but rather serving as a trustee, the UK government website recommends there to be a good reason for the person to leave the boardroom. The governing document of a company will have their own guideline as to when it is proper for a board member to be excluded or terminate their services. Whatever these may be, it is important to keep the communication at a great level to understand what is expected by both parties in terms of liability and confidentiality.
Something to consider is that an offboarding report is also important as to leave a paper trail. This type of report will show what assignments the member has had and where they’re leaving off their expertise. It can be viewed upon as an overall progress sheet of the exit.
The best possible offboarding concerning the ex-board member
Werther a board member is leaving on their own after a term is done or by a vote of no confidence, it is important to keep strict trust and confidence until the end. To cease all company involvement might not be possible, and therefore it may be good to stay on good terms with one another.
There are horror stories going around about exiting members being frozen out from the group of directors or not being asked their opinion. Clearly, that shouldn’t be the way just because a member will no longer be with the board in a few months. If the exiting person is still present during a meeting, he or she will still have something to bring.
There are advantages for keeping a parting director talking. The board member leaving will be less likely to keep quiet when they disagree as they have nothing to lose from speaking their mind. This can be a goldmine for boards who have had any type of struggles and wishes to get to the bottom of why. Communication with the exiting person might not only shine light to what has been causing issues for the company, but also how to solve them.
Keep the confidentiality with DiliTrust
With the help of secure governance software as a board portal, all user activity can be tracked. This way corporate information is sure to stay confidential and in the right hands of the right people.
DiliTrust Exec is a digital tool and has features such as sharable notes, automatic notices and tracking of user activity. This way the software is bringing the board meetings to the next level but also keeping information highly secured.
Stay informed, read our article “Planning for board succession – are you ready for tomorrow?”