Should HR Have a Seat at the Boardroom Table?
It is no secret that the world around us is changing at a significant rate.
As a result, boards of experienced business leaders who focus on the strategic direction and protection of business interests are now finding that there is an ever-evolving focus on organisational change.
However, with employees providing organisations with competitive advantage, why in many organisations are HR (Human Resources) still having to ‘fight’ their cause as to why they should have a seat at the top table? This is a question I am continuously hearing amongst many industry leaders, and one that I wanted to get some greater understanding on.
Why?
Decisions are made by boards on the direction of the business, which impacts both employees and the future workforce requirements to support them in reaching these goals. Equally, more board Directors are understanding the importance of having ‘people’ experience within the boardroom. So, why is there an onus still being put on HR leaders to prove their worth to gain a seat at the table?
Why are HR not automatically board members?
Some HR functions will be challenged with firefighting, but this buys little credibility from commercial business leaders. Additionally, with HR dealing with the tactical day to day activities, they can be perceived as a managerial function as opposed to one that should be on the board.
If organisations want to succeed they need to build a proactive and profitable workforce. However, unless HR is seen as a function which can truly add value to the board room, it risks being perceived by some as an unjustifiable overhead.
What is the role of HR in the board-room?
Once the basics are working effectively, it is about having a function that can work with mangers to ensure they are continuously delivering effective people management within their teams. This in turn should allow the HR function to move away from tactical activity to focus on finding solutions for business challenges and establish a HR strategy that drives the organisation forwards in accomplishing its goals.
This is where the role of an HR Director really comes into play.
In a world of significant technological innovation, we are seeing more automation in HR to streamline processes and improve employee and candidate experience. Whilst the implementation of a system can remove more administrative elements, it also provides an opportunity to access hard data that can be utilised within the boardroom to make more informed business decisions where people are key.
It is not just the HR agenda that today’s HR leader needs to have in their mind. A board level HR leaderrequires the same level of commercial acumen as other business leaders, to truly impact the overall direction of the business.
An organisation can either obtain competitive advantage or fail due to its people strategy and the board need to understand clearly where the organisation may be the most vulnerable. So, it is not only so the key questions around the right people and engagement they should be discussing.
Fundamentally, it is what all these things mean to the performance of the business. Without this, how can any debates around an organisations business strategy be complete?
So just why is that HR’s seat at the board table key to organisational success? Does it mean that the CEOtruly understands the strategic impact of its people on their business? Or is it the message that organisations communicate with their employees, and they truly believe that their greatest asset is their people?
I am interested in hearing the views from both HR leaders and CEO/Directors. Do you think HR should have a seat in the boardroom? And what is their role within your organisation? Let me know by leaving your comments below, or if you would be interested in a confidential discussion please get in touch at [email protected].
In the meantime, you may be interested in:
- How to Hire and Hold onto Your New Employees
- How to Identify the Best Resources for Your Business
- Corporate Culture- the Topic Everyone is Talking About
Global HR/People Freelance Consultant @ GGJ Global Consulting Limited | CPO, HR Shared Services, HR COO, Payroll
6yGreat article but please check out my book for more insights, what needs to change and who needs to step up to the plate “Human Resources Changes the World”
Account Executive at Adobe
6yLuke Shepherd
Change & Transformation | System Improvement | Programme Director | Strategy | Healthcare (07734 387717)
6yIan has nailed this. The question isn’t which discipline should have a seat at the table, but do I add value to the business.
Global Strategic Executive | Tech Founder & CEO | Business Strategy | AI | Change Management | Sales Leadership | Operations Optimisation | Transformation Specialist | Veteran
6yThe talent management and recruitment functions are only a small part in the conversation. The ability of HR to provide guidance to future organisational needs and structure, coupled to its ability to enact changes throughout then business, makes it a key piece in the complex puzzle required to deliver successful outcomes and ensure investments and transformation activities provide the required R.O.I. The HR role at board level should be reasonably generalist with sufficient knowledge of the regulations and requirements which may have an influence over, or be impacted by, board level decisions. The HR board member should have the ability to then go back to the operational HR functions and provide clear guidance on the decisions made. This helps align functions so that the desired outcomes are clearly communicated and HR can support both business and people in the most effective manner.
Global Strategic Executive | Tech Founder & CEO | Business Strategy | AI | Change Management | Sales Leadership | Operations Optimisation | Transformation Specialist | Veteran
6yHR representation is, in my opinion, absolutely a key part of the board make-up. When I undertook my role as a non-exec board member, it was a key conversation I started with the other board members, Whilst I have personally generalist HR knowledge, having more experienced HR representation on the board has been highly beneficial in supporting the discussions for future growth and structural changes. The view that HR is a tactical or operational function of the business, whilst correct in a sense, naively neglects the strategic function it should have when driving a business forward.