By James Beck
When we think of networking in an organisational context, we usually see it as something individuals do to develop and maintain relationships with those deemed to have the potential to assist them in their work or career. As a 2007 Harvard Business Reviewarticle (Ibarra & Hunter, 2007), points out the three types of networks important in business are:
- Operational networking – focused on efficiently delivering one’s day-to-day, work-related tasks;
- Personal networking – focused on personal advancement, such as career and skill development;
- Strategic networking – focused on achieving long-term, strategic organisational goals.
Ibarra and Hunter (2007) note that while managers may excel at building and using their operational networks, they often overlook their personal and strategic networks. In particular, strategic networking is a key capability of good leaders—both on the board and among senior managers, especially the CEO.
In a previous article, ‘The director’s ‘forgotten’ role in networking’, I discussed how the networking role is often overlooked despite the benefits it can bring to an organisation and recommended the following steps to help the board discover gaps in the its composition and improve its networking capabilities:
- In line with the organisation’s strategic direction, define the purpose for networking, e.g.
- Access to financial resources;
- Access to knowledge and information;
- Access to key stakeholders;
- Promoting the reputation of the organisation;
- Determine the ‘social capital’ (i.e. the social ties that directors bring to an organisation) required within the board to meet networking objectives, e.g.
- Network of contacts available to individual board members;
- Characteristics and background of individual board members.
In this article, I look at some practical ways the board can establish and accomplish its networking role. Importantly, the board’s charter should include networking in its roles and responsibilities (Kiel, Nicholson, Tunny & Beck, 2012). Having seen and reviewed numerous board charters, I have found that those boards that do see networking as a role often restrict that role to identifying individuals with the necessary competencies to be future board members.
However, developing business networks and working to promote the reputation of the organisation are key ways for directors to add value to the company, so too is networking with internal stakeholders. For example, with senior managers and staff through attendance at company social events. Visits to company workplaces are also useful networking opportunities, but this should only be done when appropriate, having informed the CEO prior to the visit. Discussions between the board and management on issues of importance can also be scheduled as required.
Odd as it may seem to have to recommend this, but directors should be encouraged to become acquainted with other board members. Board and committee meetings may be the only time some directors meet, so to facilitate better relations among members of the board, social events and team building activities outside of board meetings should be scheduled into the board’s annual calendar of activities. As Professor Terry McNulty (2010, p. 97) from the University of Liverpool has said: ‘Some of the most decisive action by boards is predicated on the basis of this informal contact between non-executive directors outside of the boardroom.’
Senior managers can also benefit from interaction with directors. For example, making managers aware of the backgrounds of new and current board members is important, as they could be a useful resource for the management team. This can be particularly helpful in start-up companies where the board’s skill set can complement management’s lack of competence in areas such as marketing or strategy. Similarly, an experienced CEO from another company on the organisation’s board can be an excellent mentor for a new or inexperienced CEO or other senior executive. Board lunches with management on the day of the board meeting are an easy way for directors and senior managers to develop relationships informally.
Another idea that some boards have adopted is for the chair to assign each director with one or two contacts to liaise with on the behalf of the organisation each year. The directors then report to the board with the outcomes of their discussions. These outcomes will vary depending on the nature of the organisation, and could range from raising the organisation’s profile with a funding body or access to previously unavailable information to strategic alliances or new suppliers.
Finally, on numerous occasions, having assisted boards with their strategic planning, Effective Governance has then been called on to facilitate a subsequent networking/stakeholder engagement planning session with the board and senior management team. Such sessions are a good way to focus board and management attention on the benefits of networking as well as stakeholder engagement, which are closely related board roles.
It must be remembered that building strategic relationships to benefit the organisation can take time. An important function for directors, therefore, can be to help connect the business and board with networks of potentially useful people and organisations. For example, an effective not-for-profit director will help to ensure the financial health of the NFP through networking opportunities. If your board has not be doing this to date, now could be the time to start.
Ibarra, H. & Hunter, M. L. 2007. ‘How leaders create and use networks’, Harvard Business Review, 85(1), pp. 40-47, 124.
Kiel, G., Nicholson, G., Tunny, J. A. & Beck, J. 2012. Directors at Work: A Practical Guide for Boards. Sydney: Thomson Reuters.
McNulty, T. 2010. ‘Developing the board through corporate governance reform and board evaluation’, pp. 83-98 in J. Gold, R. Thorpe & A. Mumford (eds), Gower Handbook of Leadership and Management Development, 5th edn, Farnham, Surrey and Burlington, VT: Gower Publishing.