Many companies are struggling with two key challenges – employee engagement and changing market conditions. A few companies have tackled both these at the same time by appointing a 'Shadow Board.'
What is a shadow board?
A shadow board is a group of non-executive employees who work with the leadership team on strategic initiatives.
Shadow Executive Boards or Shadow Executive Committees are made up of millennial advisors in their twenties or early thirties. And these groups provide youthful feedback to the company’s senior executive committee.
Why create a shadow board?
It's believed that the concept of the Shadow Board stems back to Jack Welch's days at General Electric (GE) in the early 2000s. The program is a natural extension of the "reverse mentoring" system he developed just a few years earlier.
The term comes from "shadow cabinet", which in Britain refers to a team of opposition politicians chosen to mirror the prime minister's cabinet and challenge their policies. In companies like GE, members of the Shadow Board were expected to enlighten company directors on the impact of the latest digital trends, strategies, and management styles.
Data produced for Company Director by Corrs Chambers Westgarth shows the majority of directors on ASX 200 boards are over 50 years of age. While organisations need these levels of experience on one hand, they also need to ensure they are continually in touch with their customers, employees and technology on the other, which can be aided with the assistance of a shadow board.
The theory in practice
ACCOR Hotels in France took out the Optimised Business Award for the outcomes they achieved as a result of implementing a Shadow Board. Facing increased pressure from Airbnb the French arm of the hotel group needed to reinvent their business model. Initially the marketing team was tasked with developing a new brand for millennials however after two years there had been little traction. As a result, it was agreed to turn the task over to a shadow board. In 2018 the Jo&Joe brand was launched – which was very different to the ideas previously conceived.
According to the HBR the Accor Shadow Board succeeded because they focussed on their vision regardless of the internal and cost constraints. In addition, they also developed the Accor Pass, a hotel subscription service providing people under 25 with a short-term accommodation while they looked for more permanent place to stay as a result of direction provided by the Shadow Board. Another successful initiative for their business.
Key commonalities amongst successful shadow boards
The way Shadow Boards are implemented varies across businesses; however there were some common threads between them:
Ditch the “Millennial” title
While there are numerous benefits to allowing and encouraging access to the boardroom for this new generation, in rectifying the issue, we must bear the 'millennial' label in mind. Individuals in these groups are not keen to be associated with their whiney, self-righteous peers that give the group a bad name.
The application process
While businesses may just be tempted to put their high performing talent on the Shadow Board, sometimes it is the non-conformists who can also make a big difference. After all. It isn't a group of ‘yes-people' you are seeking. Developing a list of job criteria and following an application process will help ensure the right people are selected.
Structure not stuffiness
Structure is a critical component of the success of the Board, but so is the environment. Creating stuffy rigour and hierarchy can limit thinking and create an atmosphere of intimidation, which is the opposite of the free-thinking you are seeking.
Not a special projects team
This is not an incubator team given a budget and free reign to come up with ideas. The Shadow Board operates like a regular board of directors in a governance and advisory role. Making it clear where their remit starts and finishes and how their decisions will be executed throughout the organisation is a crucial component of the initiative.
They support the primary board of directors
Decisions made by the board of directors are typically run by the group to endorse, highlight risks or suggest an alternative way forward. How this interaction occurs varies within businesses, but if the company is serious about understanding impacts on customers and employees of a younger generation, this needs to be a consideration.
Companies are enjoying the outcomes of well-structured Shadow Board programs, and this practice will likely continue to grow as we tackle rapidly changing market conditions with an increasing reliance on technology.
Contact Trojan Recruitment
Serious about building a team of highly engaged employees who may, in fact, sit on your Shadow Boards in the future? Contact a recruitment agency like Trojan Recruitment Group and get advice from the experts in labour hire, permanent recruitment and contract staff.