How to Ask the Tough Questions in the Boardroom | Tip #7: Mix and Mingle

Maureen Gershanik is a partner and a member of Fishman Haygood’s Business Section. She counsels boards of directors on corporate governance, securities law compliance, SEC reporting, executive employment matters, and executive compensation. In this biweekly series, she provides nine tips for directors as they navigate the boardroom. Click here to read Tip #6: Ask the Experts for Help.

Public company directors are under more pressure than ever to oversee enterprise risk, even risk from day-to-day operations, which is normally addressed by management. However, directors are largely removed from the action. Critical to the role of the director, then, is the ability to face and question management.

In our last tip, we discussed why it is important for a director to have unrestricted access to board advisors, including how management’s reluctance to offer such might be a red flag. Interactions outside of the boardroom, though, are just as essential as what happens in formal meetings. Keep reading to understand the importance of mixing and mingling.

Tip 7: Mix and Mingle

Directors should encourage and attend informal gatherings with their colleagues outside of the boardroom. Informal social interactions at cocktail parties, dinners, and board retreats are important to building the bond of mutual trust that is essential for a functional board. They also provide opportunities for directors to express to smaller groups concerns and questions that they are reluctant to raise on the boardroom “stage.” Regular board advisors should be included in these events so that directors can get to know them and feel comfortable contacting them with questions in the future. In addition, key company managers who are not routinely present in the boardroom should be invited so directors can establish a rapport with them. In addition to opening additional lines of communication that may help answer director questions, exposing directors to key managers allows directors to judge for themselves whether senior management is infusing the organization with the right “tone at the top” and cultivating a bench of potential successors.

Next time, Gershanik shares her advice on “going public.”