Opinions expressed by Entrepreneur contributors are their own.
Outside board members have always been a necessity, but today they are more important than ever. When a company can turn to a board with a broad diversity of insights and with members from outside the company, they receive guidance that can be the advantage they need to survive tough times. Nowadays, it seems like times are only getting tougher.
As problems increasingly have global repercussions, every decision we make could make or break a business. Outside board insights have always been a necessary consideration for staying agile and strengthening decision-making power, but now, those insights are becoming indispensable. To be more in an uncertain future, bring on outside board members for a broader selection of expertise to fill a company’s gaps and the best chance of coming through anything on top.
Related: Why E-Commerce Businesses Need to Rethink Their Channel Strategy
Look outside your company for the best fit
When it comes to members of a board of directors, there are two types: inside and outside members. Inside members serve on a board of the company where they are also an executive, such as the president, CEO, CFO or other C-suite titles. Inside members are members of a company’s governing body and they also work and manage within the same company. Outside board members are independent individuals selected for their relevant industry experience and expertise. Their only role within the company is serving on the board, not in an executive position at the company. This means they are more likely to bring unique aspects that the company currently lacks.
Whether inside or outside, the same priorities should apply when filling your board. Outside members open up the pool of options to potentially find the perfect fit. Look up and down all streams of your business, from manufacturing and transportation to retail management and marketing, to find where your company could use more expertise. Then, add that diversity of knowledge by finding top experts that match your company’s exact needs. This can be hard to find when only looking inside your company.
Related: How Your Board Should Guide Your Hiring Practices
Outside insights add value
Outside members help boards make more objective decisions and invite more ways to tackle a problem. With a diverse panel of inside and outside insights guiding a company, CEOs can disperse the responsibility of making heavy decisions onto a team of people equipped to consider them from a variety of angles. A board full of the same people used to working together can develop insular beliefs, groupthink or confirmation bias, that will prevent them from seeing all sides of the problem. Fresh eyes from outside will look at the problem differently and be able to devise previously-unexplored solutions.
Diversity of race, gender, age and socioeconomic background benefits a team, but even outside perspectives, personalities and ranges of experience contribute to the diversity of thought that can give your company an edge. Outsiders approach situations differently than those on the inside board. Their list of “been there, done that” will be different and their skills will be different from the rest of the inside board members. Their input will be unbiased. Outsiders with credible names from other fields lend just as much credibility to your company as experts in your industry, but even lesser-known outsiders bring access to a whole new portfolio of networking resources and connections.
The need for outside board members is now
Companies that have neglected to bring in any outside board members into the organization, especially in the last one or two years, are going to be running a risk of stunting the growth of their company. State and federal initiatives have been driving increased workplace diversity and maintaining an inside board limits a lot of that diversification potential. Outside boards expand the ranges of diversity you invite to advise your company. This not only complies with the broad social and governmental push, but gains a competitive edge with a greater scope of insights.
Because of new and unprecedented challenges to business, outside board members have become more critical to company success than ever. Problems like Covid-19 stunt the growth of almost any business, and executives who led their companies to success through the pandemic are now critical to a board during global emergencies.
Outside board members with a history of maintaining high employee retention offer new approaches to fight the Great Resignation. Even overseas wars affect everyone in the business world, but an outside board member with experience in crisis management could be the needed person to lend a hand during times of crisis. Instead of a crisis hurting your business, outside board members can help to manage it well through and help your company prosper.
When you are surrounded by the same circle of insider leaders and always working on the same problems, it can be easy for companies to get stuck in the same loop. The presence of even one outside point of view can be enough to break that loop. If your company growth has flatlined, it’s time to bring on outside board members to move you up to the next level. With their different perspectives, networks and experience, outside board members bring new ways to address problems and innovations that will drive a company to its goals and boost its leadership.
Related: If You Want a Good Relationship With Your Board, You Need to Ask These Questions
