The debate about what role HR should play in a business has been going on for years. Should HR be part of the C-level team? Should they be considered an operational department or a strategic partner? One thing is sure: HR departments across the organization are changing to support the ever-changing demands of employees and the customers, whilst keeping up with the rising global competition — and boards are paying more attention than ever before.
However, many businesses still believe that HR does not have anything to offer the Board of Directors, and being involved in a meeting will only be a waste of time.
According to MERIT500 recent Gender Data Report (2022), only 7% of HR in Sweden of all listed and unlisted companies have or had a board assignment. As for Finland, Norway, and Denmark, they had only 6%, 8%, and 5% of HR board assignments, respectively.
And when it comes to large-cap companies in Sweden, only 13% of HR professionals ever held a board position.
Clearly, this little data is enough to explain how HR leaders have been kept out of the boardroom, considered specialists within their own niches who lacked the all-encompassing strategic understanding needed to drive the business forward.
However, HR specialists can bring many great insights and ideas to the meeting to make it worth the board’s time. In modern businesses, human resources (HR) plays a crucial role in the boardroom. HR representatives possess intimate knowledge of their organizations’ strengths, weaknesses, risks, and opportunities – making it possible to empower the decision-makers by mapping a business strategy to its human capital assets.
This article explains why HR’s involvement in corporate boards makes perfect sense.
Managing HR is about Managing Businesses
Most HR leaders are part of the management team and know the business well. At the heart of their role is leadership. Despite their niche, they have capabilities and traits that enable them to add significant value outside the niche. A Harvard Business Review report found that the top quartile of human resources leaders excels not only at their profession’s traditional strengths but in areas that are often perceived as weaknesses.
HR Leaders Make Organizations Future Ready
To build future-ready organizations, you have to hire and retain the right talent. However, finding motivated, talented employees in today’s market is a challenge on its own.
The right HR leaders can be a key to overcoming the challenges your company might face, even though you cannot accurately predict what they will be.
HR Leaders Promote D&I in Organizations
Job seekers are making it a priority to find employers who value inclusion, especially the millennial generation. Mckinsey found that 39% of respondents decided against a job because they perceived the organization as not inclusive.
HR Leaders are the vanguard of building effective D&I initiatives in the workplace. In addition to putting in place a non-discrimination policy, they can motivate management to employ diversity and inclusion as core values.
Ultimately, there is a range of reasons why you should consider bringing HR into the boardroom, and we’ve just named a few here. Of course, many of you already do have HR directors sitting on your boards—and if that’s the case, we recommend continuing this practice and expanding upon it as necessary. Whatever your level of experience is, make sure that your HR department is equipped to help you conquer any challenges that may spring up.