A successful Independent Board Director is supposed to make its company’s Executive Management Team self-realize flaws or oversights in its business models, strategies & assumptions, and coax them to seek better alternatives that would minimize corporate risks and/or maximize shareholder value. Independent Director is supposed to articulate his/her apprehensions in a way that helps Executive Team to understand core issues and to point few clues that leads Executive Team to better alternatives allowing them take full onus of the final decisions. It is easier said than done. Being an Independent Director is a tough business and it does not suit every one even if one is most successful in one’s own profession or assignment otherwise. Hence identification and search of an independent Director represents different challenge. One of the best known Independent Directors in the history happened to be Birbal – a true Independent Minister in Emperor Akbar’s court without any executive responsibilities.
Independence of an Independent Director
Akbar the Great was the Mogul Emperor who ruled India from 1560 to 1605. He himself was illiterate, but he invited several learned people in his court. Among these people, Birbal was his most favorite minister because of his wit and intellect. There are number of folklore on Birbal in India that shows how Birbal artfully pointing out flaws in Akbar’s decision making and letting Emperor Akbar self-realize it. The story goes like this.
Emperor Akbar had a mobile court which one day found itself in a village where a young farmer Mahesh Das lived. Emperor Akbar announced that he would award thousand gold coins to the artist who could make his most realistic portrait of what he looked on that day. There was a beeline of artists and each had a covered picture of the Emperor. Akbar, sitting on a high-throne, received the portraits and rejected them one by one with his cryptic comments.When Mahesh Das’s turn came, Emperor Akbar commented “Are you like the rest of the incapables who don’t know how to portray what I look now?” Whereupon Mahesh, without fear but yet in a tone of humility, said: “Look, my Emperor, into it and satisfy yourself. “Strangely, it was not a drawing or painting, but a mirror that emerged from the folds of Mahesh’s garments to show the Emperor exactly what he was then.Akbar received Mahesh Das with open arms. And after few interactions Akbar appointed Mahesh as his Minister. It is the same Mahesh Das who was later on known to be Birbal- one of the jewel Minister of Akbar’s Courts.Birbal was probably India’s first Independent Director. Each & every folklore only points out how Birbal made Akbar realize flaws or oversight in Akbar’s decisions. They both enjoyed each other’s company despite of Birbal most of time challenging Akbar’s decisions. But the fact is that Akbar willfully chose Birbal to be his minister and intentionally gave Birbal the space and role to challenge his own decisions/ actions.
Something similar happened in recent times with India’s one of the most successful IT company companies – Infosys. During a TIE conference, Mr. Narayan Murthy, founder of Infosys, disclosed how he hired T V. Mohandas Pai- as CFO of Infosys. Mr. Murthy explained that he encountered Mohandas during a conference and Mohandas asked some questions that were critical of and the same time very core to Infosys. And after spending some time with Mohandas, Mr. Murthy realized that Mohandas not only understands the subject deeply but also has a mind of his own to express to show him the mirror. Infosys needed such professionals and Mr. Murthy convinced him to be Infosys CFO then. Few founders like Mr. Murthy can be courageous to appoint someone who can show you the mirror or challenge your decision in an executive role. Other successful promoters appoint such persons on their Board as Independent Directors.
Corporate histories are awash with incidents wherein Promoters or CEOs ,that pick up their ‘ yes sir ‘cronies as Independent Directors, had always gone down the drain irrespective of their size or might . Companies that build a strong board, to challenge their Executive Team internally, have always grown and flourished. There’s saying “Those who care for their companies, like their Independent Directors to be truly Independent”
There’s common tendency to have known & celebrity names on Company’s board. This may make board look more glamorous but it is not the assurance of performance. Appointing an Independent Director of right blend and complementing strengths would require a systematic approach to search.
Searching an Independent Director
Though it is against my own business Interests (I am in the profession of Executive Search helping promoters finding right fit Independent Directors) but I would have no hesitation in admitting that the best search of Independent Director is out of promoter or independent’s own network. One to whom promoter /CEO knew previously and & had shown the mirror deftly in the past. One should do the same what Akbar or Narayan Murthy did. However such coincidences don’t happen for every one and every time. Even if one have known someone, it is better to use an intermediary (An Executive Search firm with expertise) to confirm and verify. Personal connections can sometime be very deceptive. An Executive search firm can check credentials, attribute and fitment and not just confirmation of interest. And also if one’s own connections do not have requisite skilled person, an executive search firm can search beyond obviously created repositories/ Databanks. Independent Directors on the board are like creating a team. Each one should have different complimenting skill, knowledge, sectorial or functional understandings. It would require a systematic Independent Director Search.
Desired Attributes of an Independent Directors
KPMG’s audit committee Institute presented a paper to ASSOCHAM in year 2011 “Role of Independent Directors , Issues and challenges “ that had very appropriately put the attributes desired in an Independent Director as below :
a. Works well with others
b. Possesses the required Business/Industry knowledge
c. Is available when needed
d. Prepares for and attends meetings
e. Devotes quality time to oversee company affairs
f. Is alert and inquisitive
g. Asks hard questions
h. Challenges management assumptions
But as an Executive Search Professional, while conducting Independent Director Search or Board of Directors Search, I would define attributes in a slightly different way .Individual may already be an Independent Director / Executive Director or still at CxO level reporting to a competent Board but must have below given duly verified attributes apart from one’s own professional, functional & sectorial specialization required for that Board seat.
I. Dissents but not Resents – Challenges the Management team’s assumptions & puts forward own but does not resent when not accepted.
II. Challenges but not without viable alternatives – Express one’s Apprehension on the issues but also puts forward alternatives. Apprehensions/Challenges alone without valid alternatives are fruitless
III. Values but not above own Value system – Values one’s Independent Directorship but not at the cost of own ethics and value system. One who would not like to compromise his values for short gains?
Verification of these attributes should be done via rigorous formal & informal and direct or indirect reference checks. This will need extensively connecting with professional, personal and social sphere of that individual. Though some may advise to use psychometric tests but most of individuals in this category do not like to go through such tests. If allowed then one should do it. Again psychometric tests are best indicators. In Practice, psychometric test findings are always reconfirmed / verified through physical reference checks or interaction.
To Be an Independent Director
Are you ready to be an Independent Director? Do you dissent tactfully and without confrontation? Are you able to mend your seniors or board to your thought processes? Have you recently been instrumental in correcting some strategy / decisions / oversight in your company without leaving bad taste in the mouth of anyone concerned? Have you tested your articulation skills that get you appreciation like “Speaks less but says a lot more? “. This should be tried in your actual job consistently before you aspire to be an Independent Director. It is also important that you create opportunities for you to show your skills like an Independent Director before you actually get appointed. Like Birbal or Mohandas Pai, you can also create opportunities for you to be an Independent Director. Professional, industrial or social forums are the best places to display these skills abundantly. Are you working toward that consciously?
Last but not least, Independence of an Independent Director is a relative term. Nobody tell you to how much independence to give someone else to challenge you. It is self-imposed and most fruitful and when one enjoys it.
Author is Managing Director of Executive Search & Recruitment Process outsourcing firm MAGNA Global HR Services Pvt . Ltd , India .
Recruitment Process Outsourcing offers many benefits – when it is set up correctly. In a true RPO partnership between client and provider, RPO includes the total management and ownership of the recruitment function.
In fact, more and more organizations are using RPO as a long-term strategic initiative especially to help identify critical talent for positions which are tied to organizational performance and productivity. RPO is not seen just as a “quick fix” for organizing or improving the recruitment process any more. The strategic benefit of using a Recruitment Process Outsourcing (RPO) partner is to extend talent acquisition beyond the existing channels like job boards or social media marketing through a strong sourcing approach. This results in better quality of candidates, and helps organizations to gain a competitive edge in the marketplace.
Whether companies need support for parts of their hiring process, or choose to outsource the whole recruitment process to allow their HR professionals to focus on the core business, recruitment process outsourcing results in the following:
- improvement of the quality of hires and presented candidates
- reduction of the cost of hire
- increase in speed of hire
- creation of a larger talent pool for future recruitment
- improvement of tracking, reporting and auditing the recruitment function
- provides a scalable recruitment process
Through strong Service Levels Agreements (SLAs) the performance of an RPO provider can be measured against an organization’s internal targets and expectations. SLAs can be aligned to the improvements of what a company wants to achieve in the talent acquisition function and normally include a measure of time to hire, cost per hire (i.e. compared to external agencies), and hiring manager satisfaction.
The better an RPO provider is integrated in the HR organization and the less the provider is seen as an outside vendor, the better the results are. The RPO partner takes the time to learn and adapt their client company’s culture and values – as their own employees would.
The Recruitment Process Outsourcing Association defines RPO as follows: “When a provider acts as a company’s internal recruitment function for a portion or all of its jobs. RPO providers manage the entire recruiting/hiring process from job profiling through to the onboarding of the new hire, including staff, technology, and method and reporting. A properly managed RPO solution will improve a company’s time to hire, increase the quality of the candidate pool, provide verifiable metrics, reduce cost and improve governmental compliance”
Outsourced activities range from strategic (workforce planning) to the administrative (generating offer letters) and nearly always involve sourcing candidates. The services firm may be responsible for all hiring of a certain class of worker, such as non-exempt positions. Contract recruiters may be located at a client site, but often service the client remotely. Recruitment Process Outsourcing (RPO) services firms may help a company re-engineer its recruiting department by standardizing processes; they may write job descriptions; they may facilitate the transition from candidate to new hire. Whatever the flavor, they are expected to enhance the quality of the candidates delivered to hiring managers, and they are expected to demonstrate the effectiveness of their sourcing methods.
A Recruitment Process Outsourcing (RPO) provider can reduce recruiting costs by streamlining the recruiting process for the client. In addition, they can also help them discover how best to source strong candidates for their available roles for less money and in a shorter period of time. RPO providers achieve this so well because it is one of their primary capabilities and of course it is their core business.
The RPO process provides a number of other key benefits to businesses; it provides room for scalability and flexibility to the needs of the client along with a streamlined talent pipeline. Not only does it offer an efficient staff sourcing and time to hire function, but it also greatly simplifies the exiting of staff. The onboarding facility of the service ensures that a steady flow of knowledgeable and high-quality, skilled candidates are constantly being developed as needed by the business. Additionally, the improved efficiency can be managed through verifiable metrics and tightly integrated quality control.
With Recruitment Process Outsourcing (RPO), businesses have peace of mind that their recruitment partner has an intimate knowledge of their needs and understand exactly how best to save client time and money.
Recruitment process outsourcing is still new for a lot of companies. Some may not realize that there are options in how to outsource or to improve their recruiting process, while others may stick with other solutions because that’s the way it’s always done and that’s the way the boss likes to do things. However, if you’re serious about RPO and really want to know what it could do for your organization, then here are the awesome benefits of RPO.
Today corporate’s pay an Executive Search Professional anything up to USD 200K to search a right professional for their enterprise. Quite often people ask me why one would pay so much for finding an employee when there’s so much unemployment around. Answer is that unemployment is at lower level or at entry level due to skill mismatch or lack of information. At senior/top level there is an acute shortage of talent. Not only that, at senior level professionals do have their choices and apprehensions that makes match making very difficult. There’s saying “Executive Search Professional does not hunt those who hunt jobs”.
One of the most important roles of an Executive Search Professional is to develop a communication without exaggeration to entice the person to take career decision in favor of the opportunity presented. We have heard how Steve job convinced John Sculley from Pepsi to join Apple by asking Sculley “Do you want to sell sugared water for the rest of your life? Or do you want to come with me and change the world?” Above statement by Steve jobs depicts an art to entice an unwilling individual. Sculley proved to be most successful CEO later on. Believe me it is no easy to attract good talent when prospective employer is small and does have the matching brand equity. In early 2001 , one of my clients, a most reputed Real Estate Conglomerate at Mumbai, wanted to diversify in IT/ ITEs and was willing to invest USD 20 million in cash capital apart from lending Real Estate but no established IT CEO was willing to join them, due to obvious apprehensions. We released a half page camouflaged Advert in India & , USA, spending close to USD 100K ,mentioning Mid/ senior level positions to announce seriousness of their intent and willingness to spend. Then we identified 14 successful CEOs from IT Industry whom I had known otherwise and sent them the advert cutting requesting them to refer someone from their network for CEO position for this company. Seven of them reverted asking golden question “Who are the promoters?” and search story begins. Five of them were eventually presented to our client and one out of them joined. Some time you need to show intent in action to shake their apprehensions.
Foundation of Executive Search is research & knowledge on the DNAs of the Companies & Professionals operating in the sector of one’s specialization. It is all about reading the undercurrents of the industry and understanding professional whims and fancies of the individuals. Many confuse Executive Search Consultancy with low end recruitment Agency. Lower level recruiting is more mechanical process & number game coupled with filtering skills. One should not expect from a contingent recruiter to develop such communications strategies.
Executive Search is used by all but it is boon for SMEs who need good talent to grow their business but does not have requisite size and brand equity. At the time when Steve Job proposed John Sculley, Pepsi was global giant and Apple a pygmy. How does one convince a professional to join a small upcoming company with low paying capability is both science & art that Executive Search Professional need to exercise. Recently I was introduced to one Mid-size industrialist whose company was not doing well and wanted a Professional to turn around. But industrialist reacted sharply & negatively to my poking questions to understand the reasons for his company’s sickness. Guess what, meeting lasted just five minutes and I have to decline the mandate. If you are a Promoter / Businessman wanting to hire the services of an Executive Search Professional, my advice to you is to find a good Executive Search Professional through validated references and be transparent with that Professional to get the best out of him/her. Do not hesitate to share with them inner woes. Because an Executive Search Professional needs to understand clearly the type of person needed to do your assignment successfully. He/she needs to be clear on “must have” strengths and ill-affordable Limitations of the prospective individual if he has to do a good job. As such all of us are under the oath of secrecy & Non Disclosures. Many of the seasoned industrialists spend few minutes extra with their trusted Head Hunter because Executive Search Professionals are supposed to be very authentic source to find or validate the undercurrents of Industry or to know new good practices. Executive Search Professionals interacts with many successful Executives in the industry and are privy to many happenings & analytics in the industry
And if you are a talented individual, then best is to network with an Executive Search Professional much before you need them. Best time is when you are just getting out of middle management getting into general management roles. And if you are already at senior level looking for a change, then do connect with ones you had networked in past but don’t solely depend upon them. The reason is that an Executive Search Professional is driven solely by the needs of its clients and has very limited wherewithal to push someone through unless his/her mandate warrant it. It would be only a coincidence if Executive Search Professional happened to place you when you connected for a change. Of course one specializing in your sector will have better access and better chance to place you. But do keep in mind that an Executive Search is a very low volume business; they place not more than 1% of people they meet or know. You can use your relations to take their inputs to make better career decisions or to get deep insight on a company of your interest. A knowledgeable Executive Search Professional can prove to be a good sounding board. Executive Search Professional will invest his time in you if he/ she see a potential in you and you had maintained relationships. But don’t expect them to share beyond a limit as most of us are bound by our ethics and Non-Disclosure commitments.
Executive Search is all about relationship. Most of us have relationships with our customers & candidates that go back more than a decade. Two years ago, I placed a person, for the position of Managing Director with one of my old European clients, whom I had known for over a decade but never placed him before. During this period, this gentleman conferred with me for 3 to 4 times regarding his career moves. Thanks to this I understood that he thrives in chaos. All his successful innings were in troubled companies and he turned out to be virtual status quo manager in a stable company. So this time I have to really impress upon my client to push hard his candidature because the said company was in all sorts of troubles including the treason by local JV partner. In Last two years, this gentleman had sorted out all problems and put the company on comeback trail. You must have guessed it already; soon it is going to be the time to hand over company to someone else.
It would make a sense to keep in touch with Head Hunter just the way you connect with your doctor even when healthy. But refrain from asking oft asked question “How’s the job market these days? “ as there exists no such market. And if you consider your talent a commodity then you are not worth a search by Executive Search Professional.
The Preface: Akbar The Great was the Mogul Emperor who ruled India from 1560 to 1605. He himself was illiterate, but he invited several learned people in his court. Among these people, Birbal was his most favorite minister because of his wit and intellect. There are number of folklore on Birbal in India. As an Executive Search & Recruitment professional during last two decades, I Unlearned (learned new lessons) a lot from these stories and tried to use it in my profession for the benefit of my clients and talented individuals I met and interviewed. I am sharing few of those.
One day, a poet from a faraway kingdom arrived at the Court. He delighted everyone with his songs and poems. The Emperor, who was always generous, rewarded him well. The poet had never seen so much gold before. He was overwhelmed. Then poet offered a poem of thanks. Emperor Akbar nodded and the poet began his recitation. He spoke of the Emperor’s bravery and kindness. He praised the Emperor’s learning and wisdom. He ended by saying that Emperor Akbar was the greatest king that had ever ruled this world or any other. He is greater than God Himself. With that, the poet bowed and left the hall.There was a moment of silence. Emperor Akbar looked around and his eyes began to twinkle mischievously. “So,” he said, “it appears that I am now even greater than God”. Emperor Akbar looked at his ministers and commanders, his nobles and his counselors. He wondered if any of them would have the courage to speak the truth. Nobody stirred.
“So,” said the Emperor, beginning to feel irritated, “everyone present agrees that your Emperor is greater than God.” Nobody dared to disagree. He turned to Birbal with a frown. “And you, Birbal. Do you agree too?” he asked. “Yes,” Birbal replied immediately. The Emperor’s frown grew. “Your Majesty, you can do something even God cannot! “Birbal said. “If any of your subjects displease you, your Majesty, you can banish him from your empire, never to return. But God can not because God rules over the entire earth, the sky and the heaven. This universe is God’s Kingdom. There is no place in this universe that does not belong to God. Hence GOD cannot banish any of his creatures from His Empire.” “Well said, Birbal!” Akbar cried delightedly!
There is no body in this world capable of everything. Even GOD has limitations.
The Professional Observation
As an Executive Search or Head hunting Professional, it is my part of my role to read resumes, interview people and to evaluate to draw compatibility with mandate on hand. Many candidates in their resumes despite of limited success portray themselves as capable of doing anything, capable of managing any situation or company of anysize. Perhaps they don’t know that even GOD has limitations. During my interview and interactions with individuals, I make it a point to confront them and facilitate the understanding. Many reasonable ones are quick to correct and realize the folly and rewrite their resumes. This also helped me to build a long lasting and healthy relationship with such executives.
Interviewing, assessing and helping an individual to understand his true potential is relatively easier task when compared with making recommendations to the client. There exists a potential conflict of interest.Highlighting our own recommended candidate’s shortcomings can sometimes go against one’s own interest because for executive search professionals, a part of our income/success comes from selection. It challenges professional and intellectual integrity of even best Executive Search Professional. It has a potential to derail the assignment and most of Executive Search Professionals in such situations end up putting extra efforts. But still it has to dare it to be done.
I firmly believe, for an executive search professional, when forwarding one’s recommendations to a customer, highlighting limitations or shortcomings of the recommended candidate in an unbiased manner should be more important than highlighting strengths of the individual. it is better understanding of limitations of an individual that would be needed for success of an assignment and healthy & long lasting relationships. Such inputs in general are most appreciated by my most of my clients however one of my clients complained saying “Mr. Marwah, I have a problem in selecting a candidate due to area of concerns mentioned by you in the report. I would prefer if you could recommend someone who is fully compatible without the limitations. At that time I narrated my client above Akbar Birbal Story. In my view, once useful credentials of an individual is established then focus should be only on the limitations of individuals. One need to decide if team mate or organization can cope up with the limitations he/she has and how can it be supplemented either through a team augmentation or otherwise so that an incumbent could have smooth sailing.
As an Executive Search Professional, we also have our own set of limitations which many times our clients are notable to clearly understand or appreciate. There are usual limitations that each Executive Search Professional has in his/ her individual capacity of subject matter expertise to search a specific sector at a specific level or searching in a specific geographic location/s that any one should look at before retaining an Executive Search Professional. But our biggest limitation is that we can only search and cannot manufacture or develop an individual to perfectly match our client’s requirements. Under the light of this fact, if some of Executive Search Professionals still show courage to list the limitations of their own recommended candidates ignoring their own self-interest then it is matter of appreciation and to be proud of
The Preface: Akbar The Great was the Mogul Emperor who ruled India from 1560 to 1605. He himself was illiterate, but he invited several learned people in his court. Among these people, Birbal washis most favorite minister because of his wit and intellect. There are number of folklore on Birbal in India. As an Executive Search & Recruitment professional during last two decades, I Unlearned (learned new lessons) a lot from these stories and tried to use it in my profession for the benefit of my clients and talented individuals I met and interviewed.
Apart from his sharp intellect, Birbal was also a devotee of Sri Rama and would not miss his prayers at any cost. Wherever Akbar went, he used to take Birbal along with him. During one such instance, they took a route through a dense forest. They lost their way and both were totally exhausted and famished. So they decided to rest for a while. Akbar wanted to look around the place to see if he could find a house to get some food. Birbal asked Akbar to excuse him and went on to his prayer. Akbar looked at Birbal and preached “Mere chanting of the names of the Lord will not fetch you food. You have to put in your own efforts. You cannot achieve anything otherwise’.
Akbar left in pursuit of food. In a little while he spotted a house. The inmates of the house were overjoyed to see the Emperor coming to their doorstep for food. They treated him to the best of their capacity. Akbar finished his meal and took a little food for Birbal too. He gave Birbal the food. “See Birbal, I told you.I made some effort to find food and I got it. You were just sitting and chanting Rama Nama and you did not get any food.”
After finishing the meal given by Akbar, Birbal looked up at Akbar and said, “I have just now experienced the power of Rama Nama, like never before. You are the ruler of the land. But today even you had to beg for food. And look at me, I was just chanting Lord’s Name here and the Rama Nama made the Emperor himself to get me the food. Such is the power of Rama Nama!”
Most take the credit for resolving a crisis during which they had factually done nothing except for praying to their GOD.
As an Executive Search Professional after having identified the individual,it is very important to differentiate these traits otherwise it can prove detrimental At MAGNA Global we give lot of importance to these aspects to safeguard the interest of our clients. How can we be reasonably sure that the person we are recommending to our clients is the actually the one with right traits? After lot of hit and trial, I devised some matrices for evaluating Managerial and Leadership positions. One of them is named as ‘AAA’ Traits.
- 1st A – Anticipation – A Manager / Leader must be able to anticipate forthcoming problem or needs. In this story both Birbal & Akbar failed to anticipate the need for carrying the food with them in their journey.
- 2nd A – Act – They must act in time to avert or resolve it. In this case, Birbal failed to act at all though it seems to be his prime responsibility. Akbar took upon himself and lead from the front to resolve the crisis.
- 3rd A- Align – Akbar is yet to align the organization to find permanent solution to solution
By questioning prospective probable on AAA traits, during the interview & selection processes, one can reasonably judge the capabilities of the individuals.
Some examples are:
- Why were you or your company not able to anticipate the problem / need in advance? When did you actually realize the likely hood of the problem?
One who is used to anticipate will start giving many logically deduced indicators and explain the reasons for failure. One who is not used to anticipation will generally start putting the blame on someone else.
- How did you act? What made you to take a particular direction in response to the situation? E.g. in this story how did you decide which direction to take to find food (Of course, searching on Google cannot be the answer).
One who is the acting type will enumerate number of ways & means at his/her disposal to avoid or resolve the crisis. And you know what other kind does!
- Align – How did you ensure that it does not happen again in future or does not happen unexpectedly? This is true leadership trait. Managerial level can only give operational solution. The type of answers will decide their capability and maturity level.
In this story Akbar is yet to find permanent solution to align which he did later on by putting service posts with water and food along the journey path.
This matrix can also be used for self-evaluation. I suggest rate yourself objectively and in an unbiased manner (on a scale of 1 to 5 where 1 being the lowest & 5 being the highest) and see how you Score on AAA Matrices. The best way to do is to take at least 5 situations/ anecdotes from your professional, personal & social sphere in the recent past and rank yourself on AAA matrix. Find out which ‘A’ you excelled and which you ‘A’ you did not do well. If a pattern emerges then that a particular “A” you seem to be lacking or excelling. That will give you a way to improve. How to improve is another question which is outside the purview of this article and frankly also beyond purview of my specialization.Rate others while selecting and see how it works for you. Ratio of each A will be different from position to position, role to role and from organization to organization. We are also trying to embed these matrices in the assessment module of my new venture Universal Recruitment platform – SURPaaS. I am sharing my Unlearning experience with a hope that it will help others and sincerely request critical comments to improve it further.