I went to a seminar for those interested in becoming a boardroom non-executive director – also known as a NED.
It was disheartening when the speaker pointed out the odds against people with a marketing background becoming a NED. One of the figures quoted was a Journal of Marketing study on the S&P 1500 companies which showed only 2.6% of the 65,000 directors had managerial-level marketing experience.
Another study among board members showed only 4% believe marketing is important business experience to have (versus 47% who believe that finance is). And the thing that really shocked me from this study was a claim from a leading academic that the reason is that “the board should focus on strategic issues … and not delve into tactical issues such as marketing”.
Marketing is more than a tactic
And therein, I believe, lies the problem facing any marketer looking to be taken seriously at board level. Marketing is too often associated with short term tactics and not with making a strategic contribution to the business.
There are, of course, exceptions. Particularly in businesses where the brands they deliver form a major part of value of the business. But even then, if the board is not continually prompted to assess decisions against the values the brands represent, then those decisions – and the behaviours they spawn – can be damaging to that value.
The litany of shocking revelations from recent and current Royal Commissions into banking and aged care show massive damage done to the lives of individuals, families and the country as a whole.
Chronic ease mindset a governance failure
What’s become clear is that the most senior levels of organisations, notably boards, have become remote from their businesses and external audiences – or customers – to an alarming extent.
A condition has occurred which the initial APRA report into the Commonwealth Bank described eloquently as “chronic ease”. Boardrooms have become cosy places, and a “steady as she goes” attitude sees a sad lack of boat-rocking.
And if a head as seasoned as the National Australia Bank’s Ken Henry can have a brain snap which is interpreted as shocking arrogance, then something’s wrong.
This potentially means that the operational, day-to-day side of the business no longer has the required oversight; that people feel empowered to act without due regard to consequences. And when we consider the extent to which marketing has a seat at (or even a mention around) the boardroom table, it’s perhaps no wonder that a business’s most previous asset – its brand, and thus reputation – can sometimes be the victim of well-intentioned but ill-judged actions by folk who could do with the benefit of some wiser heads.
That’s why a strong, and strategic voice for marketing is needed at board level. And why boards need to place a higher value on the marketing function.
But to do this, marketers need to bring greater quantitative rigour to the table; to demonstrate the internal rate of return (IRR) that marketing can deliver (something I’ll talk about separately).
“Boards have become remote from their businesses and external audiences – or customers – to an alarming extent. ”
Lawyers and accountants on boards must understand marketing
Marketers must also demystify the current blizzard of consumer-facing technology for the board. The suspicion of boards that “shiny new object syndrome” is rife amongst marketers can be well-founded. But it doesn’t mean there aren’t powerful new ways to engage with customers, internal audiences or investors.
It’s time for our boards to accept more responsibility, and exercise more active authority, to ensure that their business is as protected from poor communications as it is from financial mismanagement.
It’s a board’s duty to protect the company’s assets and reputation, and they could, and should, be a lot more active in setting the messaging (from top down) and policing the external outputs.
This may require boards stuffed with lawyers and accountants to operate outside of their comfort zone, but that fluffy marketing thing can deliver a nasty bite if you’re not careful …