The Journal The Authority on Global Business in Japan

Non-executive directors are essential on the boards of large companies and can be vital to maintaining smooth operations. They bring a fresh perspective and can con­­tribute more objectively in supporting—as well as construc­tively challenging and monitoring—a man­agement team. For ambitious professionals looking to advance their career, serving in this role can be an important next step.

To help members of the American Chamber of Commerce in Japan (ACCJ) understand what it takes to be a non-executive director, the chamber held a virtual event on June 4, organized by the Women in Business Committee and jointly hosted by the Financial Services Forum and Alternative Investment, Human Resource Management, and Legal Services & IP Committees. Entitled The Role of Non-Executive Directors: The Right Skillsets and Mindset, and moderated by OECD Tokyo Centre Head Yumiko Murakami, the webinar explored the board role through a panel of three experienced non-executive directors: Jenifer Rogers, Melanie Brock, and Nicholas Benes. They shared their experiences, explained the skills they have developed, and discussed the dos and don’ts of being a non-executive director.

Nicholas Benes

THE ROLE
A non-executive director is a person who is not an employee of the company, and usually serves part time. They have the same legal duties, responsibilities, and potential liabilities as executive directors, but they are expected to bring a different perspective to the board.

Benes, who is representative director at the Board Director Training Institute of Japan and a non-executive director at Imagica Group and Advantest Corporation, began the webinar by exploring the key requirements of the position.

Starting with his own experience, he said, “Having sat on various boards for about seven years, I realized that many of the directors around me did not have the common skill sets that they really needed to be directors.” He went on to explain the essential skills needed to be a successful and competent non-executive director. These include being able to understand:

  • Financial statements
  • Cashflow statements
  • Basics of corporate law
  • Requirements of duties and procedures
  • Corporate governance practices
  • Leading-edge practices outside Japan
  • Securities law

“The role of the non-executive director is really the same as the board’s role, since all directors legally have the same duties of due care and loyalty,” he explained. “In fact, everyone’s expected to be independent-neutral, in terms of their perspective and advice to the board. It’s just that we expect even more of that from non-executive directors because that’s their more specific purpose.”

Melanie Brock

ACCESSING OPPORTUNITY
Next, Brock, who is chief executive officer of Melanie Brock Advisory Ltd. and a non-executive director at Sega Sammy Holdings Inc., offered insight into how aspiring non-executive directors can make themselves seen, thereby increasing their chance of being considered for the role.

“You need to find mentors and sponsors in the various fields that you’re working in and liaise with them. Find out more about the people who are already on boards. How did they get there? I think also you can generally be more curious about what is happening in your area of expertise,” she said.

Brock also stressed attending events and networking as key to raising your professional profile, along with leveraging search firms and reading more about your professional field.

Rogers, an ACCJ governor who is general counsel for Asia at Asurion Japan Holdings G.K. and a non-executive director at Mitsui & Co., Ltd., Kawasaki Heavy Industries, Ltd., and Nissan Motor Co., Ltd., spoke about applicant expectations and the importance of trust between a potential non-executive director and the existing board.

“I think that, when you become a non-executive director, it’s a little bit like a marriage—you have to make sure that you trust the company and that you think you can have an impact,” she explained. “For me, it’s been really interesting.

Having three companies that I sit on the board of allows me to learn about new businesses and make an impact across the whole company.”

Benes also offered advice for the interview process:

  • Study the company in advance
  • Ask about the atmosphere of the board
  • Try to understand how it functions

“If they’re very open to the concept of having new ideas, and they are willing to say, ‘Even if you don’t agree with us, we still want to hear you,’ that’s a good sign,” he said. “So, look at the mutual body language in the meeting.”

This, Benes suggests, will tell you whether the company and CEO are really hiring you to give opinions, advice, and perspectives, or if they just want to get a foreigner on the board. Asking why the company is interested in appointing you—and judging the atmosphere—is very important, he stressed.

Jenifer Rogers

DOS AND DON’TS
Benes also shared the dos and don’ts of the position.

“I thank others for encouraging me to do this, because it required me to do something I don’t do enough: be intro­spective. You may say these are obvious and relate to any large organization. This like being diplomatic, cultivating trust, asking for facts, analysis, and that sort of thing. Prepare yourself adequately, before and during your board membership.”

Studying competitors, admitting when you are confused or mistaken, sticking to your guns when you feel it is important, and providing dedication and humility in your contributions are other aspects Benes cited as important.

As for what you shouldn’t do in the role, Benes repeated Warren Buffett’s rule: Don’t vote for what you don’t understand.

“It is what you vote for that you have legal liability for. What you abstain from, and what you vote against, are things for which you have absolutely no legal liability.”

TOKEN DIVERSITY?
Often the reason for a board hire is questioned. Are they choosing someone based on their suitability for the role or are they simply interested in meeting a diversity quota? This is something both Rogers and Brock spoke about as foreign, female board members.

“I like to think that the boards that asked you to be part of their group and their organization aren’t asking you for token reasons, they’re asking because they see that you will use your voice and that you will attempt to make an impact and a change where it needs to be made,” Brock said.

Rogers gave her positive experience on a Japanese board as an example. “What is my experience like as a foreign female choice? I think I am quite diverse, just by how I look and in my background. So when I am chosen, I do feel that companies are at least ready to change. I take that as a license to speak up.”

Brock added, “I’m very proud to be the first foreign female on the Sega Sammy board, and I’m looking forward to the day that I can welcome a Japanese female colleague to join.”

MODERATOR
Yumiko Murakami
Head, OECD Tokyo Centre

PANELISTS
Jenifer Rogers
ACCJ governor
General counsel for Asia, Asurion Japan Holdings G.K.; non-executive director, Mitsui & Co., Ltd., Kawasaki Heavy Industries, Ltd., and Nissan Motor Co., Ltd.

Melanie Brock
CEO, Melanie Brock Advisory, Ltd.
Non-executive director, Sega Sammy Holdings Inc.

Nicholas Benes
Representative director, Board Director Training Institute of Japan
Non-executive director, Imagica Group and Advantest Corporation

 

Megan Casson is a staff
writer at Custom Media for
The ACCJ Journal.
For ambitious professionals looking to advance their career, serving in this role can be an important next step.