Home / Management / HR and the Boardroom

HR and the Boardroom

Posted by Chris Fields

boardroom

Here’s a crazy thought: invite the HR department into the boardroom. And here’s an even crazier thought: don’t just invite them into the boardroom, but make them part of the decision-making process. Although HR manages the human capital (or people) for a company, it is rarely brought into the strategic planning stratosphere of the boardroom, also known as the C-Suite, with other company executives.

I’m connected to thousands of HR professionals from all over the world, and I can only think of two Chief Human Resource Officers (CHROs). That’s a terrible percentage. Major corporations have to do a better job of using HR more effectively in the high-level overview of the boardroom, and less as low-level administrative gatekeepers.

Here are two of my favorite examples of industry leaders who’ve brought HR into the boardroom as strategic partners, to their benefit.

  1. First, Zappos. You may be tired of hearing about how awesome Zappos is, but it’s actually true. The CEO of Zappos, Tony Hsieh, partnered with HR to develop the company’s core values. He then worked with them to incorporate those values into their marketing, branding, customer service, and hiring processes.

    Hsieh believes company culture is so important to organizational success that he even pays employees who are not a cultural fit $2000 to quit. In a world dominated by recruiting and retention, Zappos is not afraid to lose an employee—it’s more afraid of the consequences of a bad hire. Zappos is a billion-dollar apparel company whose culture and business model is respected and copied the worldwide, largely due to its CEO’s high-level partnership with HR.

  2. Next is Ford Motor Company. A few short years ago Ford was in a tough situation–profits were down, sales were down, morale was down, service was down, and it was on verge of bankruptcy. The other big automobile manufacturers where in a worse situation. Many of them took government money better known as a “bail-out” funds, to survive.  But not Ford. Alan Mulally had just taken over as President and CEO when he noticed some major problems, like the fact that high-level executives of Ford didn’t drive Ford automobiles. And the workers weren’t engaged in the workflow process. One of the first things Mulally did was to work closely with the Group Vice President of Human Resources and Corporate Services.

They spoke with employees and asked about the products they were building. They found that the employees didn’t think the products represented the brand they had once loved and so proudly created. The CEO and GVPHR listened to employees as they talked about what they needed in order to do their jobs better, and even took suggestions regarding what made them proud Ford employees.

With this information, they began a shift, an organization change movement with a focus on creating quality products with great engines and the latest in mobile technology and social media interfacing. The result is that Ford is now the number one American automaker. Profits are up, quality is up, services are up, and customers are back.

Most people think that all HR does is hire and fire people. They have no idea about the other roles that it can play within an organization. This is because many companies but don’t use HR effectively. They don’t do a good enough job at presenting HR as a valuable asset or in a positive light. Human Resources is more than the “policy police.” Additionally, HR can help itself to a bigger role by learning more about all aspects of the business from Finance, Sales and Marketing, and Legal.

Finally, HR doesn’t generate revenue–it saves company revenue. And if you think about it, noone likes to save money (but everyone loves to spend it). Even though HR does not bring in money, it can increase profit margins. Thankfully, there seems to be a recent shift towards providing better service and hiring quality people with good character. Those two things, which are definitely within HR’s responsibility, are taking on more importance; and that should make it a lot easier for HR to find its rightful position in the boardroom.

Top 6 Competencies Every HR Professional Must Possess

HR professionals today face challenges unheard of in earlier, simpler times. From strategic thinking to technological proficiency, our list of core competencies will help you determine where your strengths lie and where you may need to brush up on your skills.

DOWNLOAD
About Chris Fields

Author

Chris Fields is an HR professional and expert resume writer with more than 13 years of experience as a former practitioner and current HR consultant. He is the curator of two websites: CostofWork.com and ResumeCrusade.com, and contributes HR-focused content to many others, including PerformanceICreate.com, eSkill.com and SmartRecruiters.com.

2 COMMENTS Join the discussion
  • Jeffry Page April, 23, 2014

    Aren’t HR issues already a board priority for most organizations? Companies have been and continue studying the talent pool availability and quality along with the costs of acquiring it.  More and more entrepreneurs focus on developing their employees’ capability in order to support their movement up the business value chain. So HR is clearly a priority at the strategic level.

  • Tracy Burton April, 24, 2014

    If HR is a strategic priority and if the board needs HR in order to implement its strategy, why aren’t more HR professionals playing a key role in the boardroom? Lately I haven’t heard about heads of human resources gaining a seat on the main board. However, talent issues aren’t receding in importance, and maybe the lack of HR presence in the boardroom is not necessarily a sign of the declining influence of HR at the top.

ADD YOUR COMMENT

Guest April, 24, 2014