THE ROLE OF HR LEADER IN THE COMPANY BOARDROOM

‘’Who will unseat HR in the Boardroom’’

A seat at the executive table has come to represent something that can be both physical and at the same time intangible. In other words, “a seat at the table” can mean an actual seat at a table that is usually an impressive piece of furniture in the C-Suite, or the boardroom, where strategic business discussions or decisions about the direction of the organization takes place. And, “a seat at the table” can also mean the ability to influence and impact those important discussions and decisions. The path for HR leaders to earning a seat at the table will be unique for each individual. Some may find a place in the C-Suite late in their career, others earlier, yet other may never find it for some reasons. Regardless of the unique path for an individual, there will likely be similarities in the skill sets of those who make it to the top positions in organizations earlier or later.

In today's dynamic and agile business landscape, Human Resources Leaders are required to play an increasingly vital role in the Boardroom. As Boards continue to come under scrutiny from stakeholders’ questions of reputation and culture, CEO succession, executive compensation, and the capability of workforces to seize and pivot to new markets and opportunities, the opportunity for HR leaders to have an influential voice in the boardroom has never been greater. The situation is changing, and taking new shape as without HR in the board room, there could be questions to remain unanswered.

From small businesses to large corporations, a good Human Resources Department is the lifeblood of a business because all other resources led by the ‘The HUMAN CAPITAL’, need the Human Resource. HR department plays a vital role in the development of a business’ strategy, as well as being in charge of?sourcing and retaining employees?– ultimately, they are responsible for ensuring the highest possible return on the business’ investment in the Human Capital. However, despite the crucial function they serve, HR is hugely underrepresented at board room level. Sometimes in organization HR role is left at the clerk level.

HR leaders are the lifeblood of an organization. They control the entire human capital of a company, and are responsible for ensuring employee attraction, retention, performance, training, engagement, satisfaction and reduction or sooth employee attrition.? It is also responsible for employees’ wellbeing. Despite this, it’s common for HR professionals to be underrepresented at board level, as they are sometimes viewed as lacking the strategic understanding that is needed to push business forward. However, as it becomes increasingly clear that talent and culture play a central role in helping organizations to achieve their objectives, this perception is starting to shift. Of recent, formidable number of organizations have realized the need to have HR leaders in board room not as invitees but permanent members of the board, not doing clerical works in the boardrooms but contributing to strategic goals and objective of the organizations. On fully fledge, HR will no longer be in board room to take minutes, but to have one of the first five agendas to present to the boardroom for strategic discussion and decision making.

Certainly, organizations globally will appreciate the presence of HR’s seat in the boardroom, if they only recognize that the strategic success of the organization depends entirely on vibrant and well- crafted HR department.

WHAT IS THE ROLE OF HR IN THE BOARDROOM?

HR Leader in the boardroom has to obtain a permanent seat from the inception of the company/organization throughout the life of that organization, and even during the insolvency or winding up of the company, HR leader Must be present. Sometimes companies hire lawyers to deal with HR matters instead of grooming HR professional in the perspective of HR Laws. Subsequently, the lawyer becomes HR Representative in the boardroom. This is totally misappropriation of the most valued organization resource. Within the boardroom, issues such as training and development, HR Policies, recruitment, performance management, remunerations and pay, compensation, and redundancies are often discussed. Despite this, it’s common for companies to still fail to fully grasp how their decisions will impact the sole engine of the success (Human Capital) of the organization. Decisions made in the boardroom on Human capital without the Human Capital Representation, are often hard if not impossible to implement. Most often, have negative impact on the organization in terms of reputation, production, corporate social responsibility, product rejection and legal binding matters. Then the question becomes ‘will the lawyer handle HR matters that don’t require law gymnastics?’ Naturally, this can have consequences for employee wellbeing and overall productivity. As earlier stated, the success of the organization does not depend on the availability and adequate financial capital resource, but on well-managed Human Capital to run and manage the financial capital. After all, it doesn’t matter how good a product or service is, if the employees aren’t happy, the business cannot reach its full potential. So what is the role of HR in the boardroom:

Human capital planning.

HR Contributions can be vital. They know the ins and outs of each department within the organization. They have valuable insights into what employees need to work to the best of their abilities and are the first point of contact colleagues go to when they are facing a work-related issue. This knowledge is precious when making top-level decisions in the business and is ultimately what helps to ensure that the policies and strategies created both reflect the needs of the workforce and align with the overall goals of the business. In addition to this, HR members provide an alternative point of view when discussing HR-related issues. Traditional board members often come from similar backgrounds such as those in sales or finance and so often make quick decisions without looking at alternative stances. The skills of an HR board member can offer new fresh insights into key business decisions and help put the company on the right path for a successful future.

Engineers of Change.

Labor laws are constantly changing, these changes have direct impact on the way in which employees should be treated, their rights, their obligations, employers’ duties and responsibility and finally the state/nation. Since HR professionals are engineers of change in organizations, they must be involved when the board rooms are making decisions. Changes such as hiring or employee development, downsizing, retrenching, transfers etc. so they can adhere to the rules and ensure the company stays compliant. In addition, they can also provide valuable contributions when it comes to CSR policies, ensuring decisions align with the priorities of employees as well as potential new talent entering the company. In such changes HR in the board room is not an option but must.

Providing data-driven insights.

Over the past few years, HR managers have introduced automated systems that have significantly enhanced productivity and streamlined numerous day-to-day processes. These systems can be used to measure and gain data within the workplace on things like retention levels, productivity measures, absence trends, employee satisfaction and wellbeing. The systems have also reduced the costs of operations – the ultimate dream of any company board. The presence of HR in the board room to explain data and numbers to the board is vital because they help executive teams make top-level decisions based on reliable data rather than making their decisions on intuition and assumption.

Planning for the future.

Developing long-term strategies such as organizational structural changes and training and development isn’t easy. Whilst the contribution of executive leaders is valuable, they can’t always accurately predict how such changes will impact employees’ day-to-day working life. HR professionals have their finger on the pulse when it comes to the priorities of the workforce, they can provide insights as to how these strategies should be developed and implemented effectively.

Enhanced communication.

HR professionals are well placed to act as mediators between what is discussed by executives in the boardroom and what is discussed by employees in workplace corridors. Problems team members are experiencing can be brought to the attention of board members and thus be met with the appropriate action. Such information from the corporate most valued resource has no means of reaching the boardroom except through HR, the employees contribution in decision making of any organization is done through the representative, HR. This develops a high level of transparency within the company creating loyalty and trust amongst employees and helps them to feel more involved with how the business operates. They can also increase communication within board meetings themselves, using their interpersonal skills to bring thoughts and ideas into one productive resolution when constructive conflict occurs.

Attracting new talent.

Attracting and retaining new talents is a strategic plan and objective of any organization through HR departmental HRM strategic plan. HR leaders understand human behavior and have a good knowledge of what top talent (Millennials) is looking for in a company, making it an excellent idea for them to be present when developing hiring strategies. They can also help to keep CEOs’ minds open when it comes to hiring employees who may have a different set of preferences and priorities. Proposals for new talents and how to go about acquiring them for the better productivity of the company, HR can only deliver it to be understood by the board and CEO through having a seat in the boardroom.

Corporate Culture and Employee Engagement.

HR’s role in the boardroom is also tied to ensuring a strong corporate culture and employee engagement. HR leaders are responsible for developing and implementing strategies that create a supportive and inclusive work environment. Building a desired culture for the organization is most important.? HR is a lead player in the game of changing the culture and maintaining the desired cultural practices of the organizations. Championing employee well-being, recognition programs, and fostering effective communication channels, HR enhances employee engagement, productivity, and reduces turnover. In addition, working (often in partnership with control functions) to effectively embed and measure the efficacy of culture initiatives has become an important element of the role. These programs to get to the mind of CEO and other top organization decision makers, they need to mingle with HR in the boardroom.

The Expanding Role of HR

Traditionally, the boardroom has been focused on high-level decision-making and shaping the strategic HR direction of the organization. However, the evolving nature of the business landscape has made it imperative for HR to contribute to these discussions. In order to enrich these decisions of the organizations regarding HR, HR has to bringing their knowledge and understanding of the workforce to inform critical business decisions through the boardroom.

Future Workforce Planning

One of HR’s most vital contributions to the boardroom is its ability to engage in future workforce planning. HR leaders possess a deep understanding of the organization’s human capital, enabling them to identify current and future talent needs, address skill gaps, and develop strategies to attract, retain, and develop the best talent. They contribute insights on workforce demographics, succession planning, and diversity, equity and inclusion initiatives that align with the company’s strategic aims.

Change Management and Organizational Development

As businesses undergo series of transformations, HR’s expertise in change management is invaluable. With the ability of HR expertise in analyzing current and expected future organizational structures and demand, HR professionals work alongside the board and senior management to develop and implement change initiatives. The development of the organization is embedded in HR transformation and building a culture and norms that will see the organization at the top in the business setting. Such developments can’t be developed without the architectural art of HR. They assist in managing the impact of change on employees, facilitating training programs, and ensuring successful adoption of new processes, systems, and technologies.

Precisely, HR leader in the boardroom is inevitable. Despite the nature of the job and its role. HR involvement in the board which much far beyond clerical works, makes his presence indispensable. Organization will struggle to justify the stay of HR in boardroom because of the immense credential and critical analytical thinking for HR.? HR will assume more roles in the board room including chairing the board meetings in the absence of the board chairman and co-chairs. As seen somewhere above, the first five agenda of the board room discussions will involve HR presenting crucial matters pertaining the strategic organization human capital. With the emerging data driven decision making in HR field, HR leaders must be Data analytically savvy to keep the seat vibrant and relevant.

Who will unseat the HR in the boardroom; that is a topic for another day.

?

Rutaihwa Aristides; MHRM – OUT; BHRM- MUK, (CHRBP) AAPM

Regional Human Resource Management Officer- Geita??

Tanzania Revenue Authority

BLOG:www.rutaihwa.blogspot.com

LINKEDIN: Rutaihwa Aristides Andrew

Instagram; Exploring_Hr_Profession

X; @arutaihwa1

Facebook: Rutaihwa Aristides – exploring the HR profession

Tel: +255685690135(WhatsApp/Telegram)

?