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Why external board members are critical to business success

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External board members have always been a necessity, but today they are more important than ever. When a company can turn to a board with a broad diversity of views and members from outside the company, they receive guidance that can be the advantage they need to survive difficult times. These days it seems like times are only getting tougher.

As issues become increasingly global, every decision we make can make or break a company. Outside insights have always been a necessary consideration to remain agile and strengthen decision-making power, but now, those insights become indispensable. To be more in an uncertain future, you need to attract outside board members for a broader selection of expertise to fill a company’s gaps and the best chance of getting something out of it.

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Look outside your company for the best fit

When it comes to board members, there are: two types: inside and outside members. Inside members serve on a board of directors of the company where they are also an executive, such as the president, CEO, CFO or other C-suite titles. Inside members are members of a company’s governing body and also work and lead within the same company. External board members are independent individuals selected on the basis of their relevant industry experience and expertise. Their only role within the company is to serve on the board of directors, not in an executive position with the company. This means they are more likely to bring with them unique aspects that the company is currently missing.

Whether indoors or out, the same priorities should apply when filling your plate. External members open the pool of options to potentially find the perfect fit. Look up and down all streams of your business, from manufacturing and transportation to retail management and marketing, to see where your business could use more expertise. Then add that diversity of knowledge by finding top experts who exactly match the needs of your business. This can be hard to find if you only look within your company.

Related: How Your Board Should Guide Your Hiring Practices

External insights add value

External members help boards make more objective decisions and invite more ways to tackle a problem. With a diverse panel of internal and external insights guiding a company, CEOs can shift the responsibility for making tough decisions onto a team of people equipped to view them from different angles. A board full of the same people who were used to working together can develop insular beliefs, groupthink or confirmation preference, that will prevent them from seeing all sides of the problem. Fresh eyes from the outside will look at the problem differently and be able to come up with previously unexplored solutions.

Diversity of race, gender, age, and socioeconomic background benefits a team, but even outside perspectives, personalities, and areas of experience add to the diversity of thoughts that can give your business an edge. Outsiders approach situations differently than those on the inside. Their list of “been there, done that” will be different and their skills will be different from the rest of the internal board members. Their input will be unbiased. Outsiders with credible names from other fields lend your business just as much credibility as experts in your industry, but even lesser-known outsiders provide access to a whole new portfolio of network resources and connections.

The need for external board members is now

Companies that have failed to involve outside board members in the organization, especially in the past one or two years, are at risk of stunting the growth of their business. State and Federal initiatives have led to greater diversity in the workplace, and maintaining an inside board limits much of that diversification potential. External boards expand the diversity you invite to advise your company. This not only satisfies the broad societal and governance push, but gains a competitive advantage with a wider range of insights.

Due to new and unprecedented challenges for business, external board members are more important than ever to the success of the company. Problems like Covid-19 stunt growth of nearly every company, and executives who have led their businesses through the pandemic to success, are now critical to governance during global emergencies.

External board members with a history of maintaining high employee retention are offering new approaches to combat the Great Layoff. Even overseas wars affect everyone in the business world, but an outside board member with experience in crisis management can be the person who can lend a hand in times of crisis. Instead of a crisis damaging your business, outside board members can help you manage it well and help your business thrive.

When you’re surrounded by the same circle of insider leaders and always working on the same issues, it can be easy for companies to get stuck in the same circle. The presence of even one point of view from the outside can be enough to break that loop. If your company’s growth has leveled off, it’s time to hire outside board members to take you to the next level. With their diverse perspectives, networks and experience, external board members bring new ways to tackle problems and innovations that will propel a company towards its goals and boost its leadership.

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