HR Support of Corporate Boards

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Author(s): Excerpted from the Jan. 1, 2006 issue of Human Resource Planning

The degree to which the board asks HR for support with issues that involve strategy and organizational effectiveness varies significantly from firm to firm, but it does not vary randomly. A number of factors show a strong relationship to the degree to which the board asks for help. One key factor is the strategic focus of the organization. The more it involves issues of human capital and knowledge, the more the board asks HR for help.

The HR strategy of an organization is a second factor that is related to the use of HR by the corporate board. HR functions that see human capital as a key element of their role in the organization and develop metrics and analytics to support their activities are most likely to be asked for help. Only when HR sees itself as a strategic function, which contributes to effective organization change and human capital utilization, is it asked for help by the board on a broad range of strategic and organizational effectiveness issues.

The third issue in determining whether HR is asked for help involves the actual structure of the HR organization. When HR is structured with a strong corporate center, it is more available to the board and is therefore used more by the board for help with strategic issues. Complementing centralization of HR is the use of information technology, which can allow HR to answer strategic questions and provide potentially useful data for decision making on the part of the board when it comes to organizational effectiveness and strategy.

Effective use by HR of metrics and analytics is strongly related to the board's asking for help. This follows logically from the board's need for numbers and metrics in its own decision making process, and therefore utilizing the HR function when it can provide analytics and data. Not just any analytics and data work-HR needs data that focus on organizational performance and business strategy, not just data about how effective the HR function itself is in delivering its services and products.

The need for analytics and metrics represents a major challenge and opportunity for HR. All too often, it finds itself either not included in board decision making or not listened to in board discussions, because it offers opinion rather than data. The results suggest that when HR can offer data, it will be asked for help and have more of an impact.

Closely related to the kinds of activities that HR needs to engage in, in order to be asked for help by the board, is the kind of skills it needs. HR definitely needs skills that go beyond the technical and nontechnical administrative skills typically associated with the HR function. These are important and, as the data from executives show, not to be overlooked. However, the HR function and HR leaders need skills having to do with organizational dynamics and business partnering. They need to be used to develop strategic insights that connect human capital data to business strategy. They also need to understand how human capital makes a difference in the business.

When HR leaders have these skills, and when the overall HR function is able to perform effectively, then HR is more frequently asked by the board for help.

Excerpted from the Jan. 1, 2006 issue of Human Resource Planning.

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