If you are an established and growing SME, then having regular Board meetings can help to provide guidance, set the strategy, and oversee management. Board members do not necessarily have to be people on your Senior Leadership team, they could also be external advisers or consultants who can bring impartial strategic leadership advice and fresh perspectives that contribute to the performance and growth of the business.
Before we look at the role of HR on a Board, let’s first look at the fundamental question: What is the purpose of the Board of a small business?
Strategic Direction: The board helps set the long-term vision and goals for the company, ensuring the owner(s) aren’t solely focused on day-to-day operations, but also strives to achieve growth.
Sound Decision-Making: Board members can provide valuable insights and challenge assumptions, leading to more well-rounded business choices.
Accountability: The Board holds the owner and management of the business accountable for achieving the set goals and ensures the company is operating ethically and legally.
Network and Connections: Board members with specific industry knowledge or experience can offer valuable advice and connections that a small business owner might lack.
Risk Management: An experienced Board can help identify and avoid potential risks that could harm the business.
The role of HR on a Board
Having HR expertise or representation on your Board can provide advice on the growing importance of talent development, employee retention, and also help the company make progress on topics such as sustainability and DE&I—some of the most important considerations for businesses today.
HR – inhouse or external
A small business doesn’t technically need a HR function in-house, but when they have a growing number of employees, an external HR consultant can be brought in to handle tasks such as recruitment, creating HR budgets or policies, training and development of people, and even managing payroll. Their role is crucial to the sourcing, development and performance of a company’s most important asset – their people.
As such, regardless of whether your HR is inhouse or you have an external consultant, here are some of the ways their role on the Board is valuable to the growth of a small business:
Workforce Planning: HR brings a deep understanding of the current and future talent needs of a small business, and can advise the Board on attracting, developing, and retaining top talent to achieve strategic goals.
Culture and Engagement: They can use employee sentiment to help direct and shape the culture of a company and how it impacts overall performance.
Compliance: They understand the most up to date employment laws and regulations, and can help mitigate potential legal risks with decisions they make around their people.
Crisis Management: HR’s experience can be invaluable in guiding the board through potential crises like workplace misconduct. They can also ensure that takeovers, mergers and redundancies are handled in accordance with the law.
Diversity and Inclusion: HR plays a key role in fostering a diverse and inclusive workplace. A HR Board member can champion these initiatives and ensure they are aligned with the company’s overall strategy.
Time for HR to get on Board?
Yes it is! Because ultimately, the success of a business relies on having a productive and profitable workforce, and the force behind this is a strategic HR representation on the Board. Their input will not only ensure that every decision you make is aligned to allow people to deliver the mission and vision of the company, but they will also support the right HR strategies that attract, retain, and develop top talent.
If you are considering HR representation on your Board, contact 1850 for strategic guidance and advice to help support the growth of your business.
