The debate: does HR belong at board level?

21 January 2016

Author: Kirsty Tuxford


The debate: does HR belong at board level?

Is genuine influence more important than status? Four experts mull it over

There’s something missing – a secret sauce or magic dust – that is stopping HR getting to the top table
 
I believe that HR should be trying to get on the board. But the metrics used in the past to measure the success of the HR function may no longer be relevant or understood by the business. A new era of data analytics should help HR’s cause and provide hard evidence. This, coupled with its role in creating an engaged, inspired and creative workforce, should continue to be a top priority. But there’s something missing – a secret sauce or magic dust – that is stopping HR getting to the top table.
 
For any function to be credible to the board it must at least add value, be commercial and lead from the front. It has to be authentic and do what is says on the tin. If that is talent acquisition and development, then do that, and do it really well.
 
If HR is to secure a place on the board, financial return and commercial output are not the right metrics. It is wrong to assume that the function of managing the greatest asset of a company – its people – can be measured by the same criteria that is focused on what the investors and shareholders want. HR must show that it believes in its people, and that it genuinely wants to attract, retain and develop them.
 
Matthew Lewis, Partner, Middle East and Africa, Boyden global executive search
 
HR must think strategically and speak the language of the business to get a seat on the board
 
HR should not give up trying to claim a seat at the board table, but it has a lot more to do in terms of transforming its way of thinking and proving the value of its contributions to the business.
 
In the Middle East, HR is not always seen as a profession that adds value to the business as it lacks the necessary business skills and mindset to think strategically in the minds of some leaders. It is not data-driven in its way of thinking and planning, and so loses credibility in convincing the business to adopt its proposals.
 
To change this perception, HR must become customer-focused, mirroring the marketing function in terms of identifying and understanding emerging market trends and how these may affect the organisation. It needs to shift its mindset and way of working. It must think strategically, and understand and speak the language of the business to get a seat on the board.
 
Some self-criticism and monitoring of staff, services and programmes, as well as seeking feedback from the business, would help HR build the capabilities that are necessary to strategically partner with the organisation and take part in shaping and driving people strategies. The employee lifecycle should also be managed more proactively, with effective programmes to support each stage.
 
Elie Georgiou-Botaris, Middle East practice lead for talent management and organisation alignment, Towers Watson
 
HR professionals need to prove they understand business to be taken seriously
 
Business leaders in the GCC believe that people are the most important factor in achieving strategic success and that the effective management of those people will add significantly to the bottom line. Human resource management is therefore a critical board-level issue and there should be an effective HR VP or director on the board. So why isn’t that always the case?
 
Our research shows that Gulf leaders believe people and talent are key to their future strategic success. But they also tend to think that the management of people and talent is too important to be left to HR professionals. Only 25 per cent rate their own HR functions as excellent. HR professionalism in the GCC is still relatively low, with only 10 per cent being members of any HR professional body. The thinking is that the strategic management of people and talent is the job of senior line managers.
 
HR leaders in the region who have been invited to join the board generally have business experience and are HR-savvy. Forty per cent of our sample had not had any HR-related training or education – one of the most influential was originally in IT, and another was in marketing. A long career in HR is currently not the only route to a strategic HR role, but that will change over time.
 
Professor William Scott-Jackson, Oxford Strategic Consulting
 
The idea of a board seat in itself is far less important than the influence you exert inside an organisation
 
I would never advocate HR giving up the idea of being on the board. But as the profession has matured, we have come to realise that the idea of a board seat in itself is far less important than the influence we are able to exert inside an organisation. The most effective and inspirational HR professionals are those who have won credibility through their actions, and are able to connect what they do to clear business outcomes.
 
This is about having the courage to challenge – about saying something of real importance rather than just expecting to be listened to. This has never been more important in Middle East organisations. At a time when belts are being tightened across the region, it’s HR’s job to optimise the return on people investment and make the case for a long-term view.
 
There is also the question of what actually constitutes the board. Many HR directors may have a seat on the executive board but not be part of the executive team making key decisions. I’ve seen HR professionals on the board who don’t challenge or sound credible, but I’ve also seen many outside a formal board role who understand strategy and broader business contexts, and can connect a people strategy to the business by deploying their specific HR experience. They didn’t reach that point by being overly concerned about a seat at the table – they did it through having curiosity and delivering results.
 
Amy Baxendale Senior employer solutions manager, CIPD Middle East