8 Habits of Successful Board Leaders

Lead directors need to be diplomats, have the ability to inspire trust, and have the stature if not the experience of a CEO

By Theodore L. Dysart

Spurred by reforms in corporate governance, the number of boards that include the position of lead director, or some variant, has escalated dramatically. So has advice about what the role entails in such key areas as strategy, fiduciary responsibility, and subjectmatter expertise. But what of the personal attributes that a lead director must have to meet the subtle challenges of the role? A series of conversations with some outstanding lead directors turned up surprising agreement about the personal characteristics and technical qualifications that the role requires.

Among the technical qualifications cited by these lead directors, three stand out:

1. CEO-like stature and experience.
"I think it's preferable if the person has had CEO experience," says Dick Hanselman, lead director, Forward Air Corp. "It gives the lead director a lot of credibility and a very clear understanding of the dynamics that exist between the board and the chief executive and between board members." Nevertheless, he says it's not an "absolute" requirement. Echoing the views of most of our interviewees, General John "Jack" Chain, Jr. (USAF Ret.) and lead director for Reynolds American, says CEO experience is "a positive, but not a requirement" for the lead director job.

2. Tenure on the board of approximately two years.
Although some boards have attempted to parachute a new lead director in, all of our interviewees agree that it's a bad idea. Les Brun, who is chairman and CEO of SARR Group, chairman of the compensation committee for ADP, and a director for Merck and Broadridge Financial Solutions, believes that it takes nine months to a year to understand the company, and even longer to develop relationships with other board members. Corbin McNeill, lead director of Owens-Illinois, points out that if the board meets frequently enough, the rampup time for becoming lead director may be as little as 18 months. In any case, he says, the potential lead director should have experienced at least two strategy sessions in order to be fully aligned with the objectives of the company.

3. Time to devote to the job.
An extensive study of board effectiveness conducted by Heidrick & Struggles in conjunction with the Center for Effective Organizations at the University of Southern California's Marshall School of Business, found that the average time directors spent on board matters increased from approximately 150 hours in 2001 to more than 200 hours in 2007. For lead directors today, the figure is likely to be as much as 300 hours. Further, says Hanselman, the lead director must be available to the CEO "virtually at a moment's notice." Says Hanselman, "The CEO has to feel he can pick up the phone at any time and expect a callback within eight hours. I have seen two instances in my career where that time was absolutely critical."

Although "lead director" suggests "leadership," the word heard repeatedly in our interviews was "diplomat," which more accurately captures the subtleties of the role. The five personal characteristics that our interviewees most often cited as indispensable paint a portrait of the tactful emissary moving easily between the board and the CEO and judiciously helping resolve issues of mutual interest. Those five characteristics, say our interviewees, include the ability to:

4. Inspire trust.
Bill Newlin, head of the nominating committee for the board of Kennametal, has served as a non-executive chairman, a lead director, and a presiding director in the course of his career. "The lead director, besides having the qualities of any board member—good judgment, integrity, and the like—must have the personality to encourage trust with the board and trust with the CEO," he says. Part of that trust, says Brun, is the confidence on the part of the other board members and management that the messages delivered by the lead director "won't be filtered by the biases of the messenger." It is in that respect, he says, that the position becomes "a diplomatic role."

5. Communicate effectively.