Business leaders are typically headstrong and ambitious, with a clear idea of how they want to achieve their goals. This can make it difficult for boards to give advice or influence their decisions.
Sabine Schilg is VP of Customer Success at iDeals VDR, and previously worked in global leadership roles at IBM and Carbonite. She’s worked with more than 20 startups and sat on numerous company boards and advisory boards.
We spoke to Sabine about what it’s like to sit on different boards and how to build strong relationships with CEOs and fellow board members.
Q. You’ve sat on a number of different boards. How challenging is it to juggle the different agendas and read all the materials?
It’s not that big a commitment! Most company board meetings are once a quarter and you may get a couple of calls in between. Some CEOs don’t even want the board’s advice, they just want the board to approve what they do.
In Switzerland companies mainly just want investors to sit on their boards to network with potential customers. For instance, if you wanted to reach out to the biggest bank in Switzerland, you’d see if one of your investors already had a relationship with them. Board members are selected on the basis of what they can do for your company.
Q. What’s the main difference between an advisory board and a board of directors?
Most company boards have set agendas for each meeting with financial reports and strategic issues. The items are focused on what the board needs to approve, such as purchases over a certain amount, hiring, compensation, M&A deals, and so on.
Sometimes with smaller boards you might get more of an open conversation, but larger boards tend to delegate topics to committees that meet separately, so there is very little dialogue at the meeting itself.
Advisory boards, on the other hand, are all about the discussions. For instance, on one of the boards that I advise the CEO is a technical guy and he’s asking my advice on dealing with commission rates for his sales team because he’s never done them before.
That’s typical for an advisory board – ‘I’ve got a situation I haven’t faced before, you guys have, please advise me.’ I’m not telling him what to do, I’m just sharing my experience so he can then make a decision. For instance, they’ll show me a new product roadmap and ask me what the pricing pitfalls might be.
Q. In an interview with Adrienne Arthurs we spoke about how to improve communication between boards and CEOs. What are your thoughts?
That depends on a range of factors. CEOs will always say yes to your suggestions, but they don’t really want to accept supervision, they want to be able to do what they want.
But in Switzerland, each board member is personally liable for the company’s finances, so that’s a different relationship to the US, where board members have insurance and can let the CEO do things without direct consequences to themselves. Like when Covid hit and businesses ran out of cash, board members of Swiss companies were demanding they file for bankruptcy to avoid having to fund losses from their personal income.
On a personal front, it’s about how you can influence certain personality types. CEOs are usually entrepreneurs; they have a vision and they believe in what they do, so they don’t like you trying to tell them what to do. You have to find a way of engaging with them. In the final analysis, if you really can’t make it work, you have to step down.
Q. Before that, what steps could you take? Would you speak to other board members? Would you take the CEO to one side and try to mend the relationship?
Firstly, I have to say I don’t think board leadership is different from any other kind. The higher up people are, the more difficult it is to influence them. Getting high-profile people to listen to you is often about asking the right questions. You’re not telling them the answers, but giving them ideas to think about, and maybe sharing stories of your own experience that prompt them to think of solutions.
Secondly, it’s about active support. For instance, if you can help broker discussions with customers or with other companies to exchange ideas and benchmarks you are more likely to build a relationship where somebody will listen to what you have to say.
You do need to capture the CEO’s attention, ideally early on before things can go wrong and they have to deal with regulatory issues, especially bankruptcy and liquidity regulations. Then it’s too late!
Q. How much interaction do you have with other board members outside of board meetings?
There was one instance where we couldn’t influence the CEO and board meetings were getting very defensive. I had conversations with individual board members to find somebody she would trust, who would be willing to have a one-to-one conversation with her. I thought that would be less intimidating than sitting in a Board meeting with six people telling her she was missing all her goals.
With my advisory board, the CEO often calls me one-on-one to ask for my opinion. He tends to ask questions like, ‘Have you seen this before? What did you do in these situations?’
So yes, I think one-on-one discussions are good; with the CEO and other board members, but it depends on circumstances and what the code of conduct is for that particular board.
We should have conversations around whether we want to have one-to-ones; is it appropriate to hold smaller meetings? Should we then come together as a team to discuss the outcomes? I think that’s a reasonable discussion for any board to have.
Q. At what point should board members decide it’s time to step down?
In principle, I would expect people to move on once they feel they can’t make a meaningful contribution. A number of my friends have stepped down from boards once they felt they had no more to offer.
That said, it’s different for smaller companies where you might have money invested in the company, so you want to stay to see a return on that investment.
Of course, over time it becomes more routine. When you join your first board you might be very excited about making a difference but then find that your involvement is much more limited than you expected.
But if you aren’t motivated you have to say, ‘I’m not doing it anymore.’
