Public Boards are increasingly under siege by shareholder activists, putting unprecedented pressure on Board members to perform in all manner of ways to boost enterprise value. But what does it mean to perform as a Board member? We sat down with Todd Diener to discuss how he is navigating the new normal for Board directors in hospitality. Todd is perhaps best characterized as a statesman in the restaurant industry. His resume, including top leadership roles at Chili’s and Brinker International, arguably has become even more impressive after his formal retirement. Diener is having the most fun of his career by keeping busy serving on four Boards. Never one to sit idle, he spoke to us over lunch before heading to Nairobi for a Board meeting of a burgeoning coffee/cafe concept.
Todd identified three specific opportunities where Boards can add greater enterprise value to all stakeholders:
- Development: Beyond fulfilling oversight functions for shareholders, Directors are uniquely positioned to take an active role in executive development by serving as proactive mentors and advisors to the company’s senior leadership team. C-suite talent can and should benefit from (i) Directors’ individual and collective knowledge and expertise and (ii) learning how top industry players approach problem-solving and decision-making. In these ways, Directors help groom the leaders of today and the Directors of tomorrow.
- Diversity: Boards need to strive for greater internal diversity to guard against “group think” in its deliberations and conclusions and to reflect more accurately the values and mindset of the company’s customer or client base. This helps organizations stay grounded, measured, relevant and adaptable. Alignment of vision, goals and initiatives within an organization is critical for achievement, but strong alignment also introduces the risk of “tunnel vision.” Boards should round-out the perspective and agenda of a company’s senior leadership team, as well as contribute to an organization’s efforts to deliver on brand promises via sensible business principles.
- Delivery: Expanding on the diversity theme, Boards should better identify and fill their internal competency gaps. In Diener’s experience, operations expertise is the most common blind-spot on Boards, and this is especially absent in Boards of smaller companies. In other words, Boards should be able to help organizational leadership define and deliver on the company’s brand promises to customers. To this extent, Boards must embody tactical expertise as well as strategic acumen.
Diener feels that for all the talk and attention on a company C-suite, it is also time to focus on boosting leadership at the Board level. More is being asked of boards in terms of time, attention and responsibility. Today’s Board directors are being held to the same level of responsibility for company performance as managers. Poor performance and bad behavior by senior management will put directors on the hot seat just as quickly as the management team. Oversight is not enough in today’s competitive marketplace. Adding shareholder value is a requirement, so heed Diener’s recommendations if you want to be a successful Board member.