Reasons for Placing Board Members from Outside the Industry
It’s common for people to rise towards the top of the corporate ladder by working hard and proving their worth. Others are happy to be where they are, while some people strive to reach the pinnacle of success. Some employees who have been with the company for years might even end up sitting on the board of directors.
There’s nothing wrong with this idea. Insiders have been around for many years and they’re familiar of the industry. They know what to expect. They also have excellent insights into how to run the business. Since they’re part of the decision makers, their deep understanding of the industry can go a long way.
However, it might also be a good idea to consider outsiders. These people don’t necessarily have to be from the same industry. Hiring them to be part of the sitting members of the board can offer advantages.
They have a different perspective
When the pool is composed of people with the same interests and knowledge, they might reach the same decision. They can’t see the other side of the coin. When you place someone from outside, they will bring a different perspective. They might enlighten everyone about what could happen when certain decisions are made. Diversifying the perspectives can help boost the company.
They know about other industries
All the industries are interconnected. If the business is under the food industry, the movements in the transportation and communication industries can affect it. Therefore, having someone who views the game from a different lens will make the company more successful.
The judgment will be more objective and freer from biases
When you put a board member from outside the company, this person won’t know nothing about the dramas inside. They will remain objective in their decisions. They won’t be influenced by anyone. Their decision will be based on numbers and nothing else.
They have sufficient experience
Just because you’re hiring someone from a different industry doesn’t mean this person has no experience. It might be a different experience, but it still shows expertise, nonetheless. The company will still pick the right person who can do an excellent job despite not having insider knowledge.
It might be a risk to hire someone who isn’t from the same industry, but it would be worth it. Besides, the board already has enough people from within. It’s time to diversify the bench and allow a different perspective to be taken into consideration. There will also be a conversation among the board members. There won’t be a vote until the matters have been thoroughly discussed.
Industries evolve and companies must adopt. The lack of innovation and the fear of taking the risk can backfire. It could leave the business behind the rest of the competitors.
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