Why Board Inductions Are Vital: An ELGP Project
Why Board Inductions are Vital: An Engaging Young Leaders in Governance Project
Why are board inductions so vital?
In modern boardroom environments, preparing new directors is essential to managing an effective board, however, how to best equip new board members for the unique challenges presented by board membership can often be unclear.
The Australian Institute of Company Directors states in their director’s toolkit Evaluating an Organisation before Joining that the focus of a Director’s Due Diligence is not always clearly defined. This tasks boards with the challenge of how to ensure new members are board ready and aware of their responsibilities before undertaking a directorship.
Given that this information is not always specified or known, members of the Emerging Leaders in Governance Program (ELGP) were tasked with the challenge of participating in a project to assist boards with how to best prepare new members with transitioning into a directorship.
About the Project
The ELGP Project: ‘All Aboard: Why Board Inductions are Vital” aims to equip boards with the tools and checklists to support time and resource poor boards so they ensure new directors are board-ready and aware of their responsibilities by day one.
Tracey Long, the founder of the Boardroom Review – a specialised consultancy on boardroom evaluation and corporate governance – insists that board inductions should be essential. She argues that inductions play a significant role in ensuring that new board members are well informed regarding their responsibilities and organisation prior to boardroom admittance.
“An effective board induction is essential for new board members if they are to maximise their contribution within a reasonably short time scale.” – Tracey Long, Founder of The Board Room Review
Even the most experienced directors can benefit from participating in board inductions, allowing members to learn about the particular board structure, process, culture and life-cycle that is unique to each board.
The repercussions surrounding the failure to provide directors with inductions or if they are not performed correctly were discussed by The Royal Commission into Misconduct in the Banking, Superannuation and Financial Services Industry. The findings emphasised that inductions should include key risks and issues facing the company and that a preliminary induction should occur “as quickly as possible.”
Overall, the research and lived experience places significance on the role inductions play within boardrooms and the value they provide to future leaders.
To learn more about the project and best practices for boardroom inductions, visit our resource toolkit here.
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