Boards without marketers risk getting bitten by a reputational disaster
Most boards lack anybody with a marketing background. Businesses need to realise the value marketers bring to the (boardroom) table, argues Tim Parker.
I went to a seminar recently for those interested in becoming a boardroom non-executive director (NED).
It was disheartening when the speaker pointed out the odds against people with a marketing background becoming a NED. Quoting a Journal of Marketing study on the top 1500 companies in the US, they noted that only 2.6% of the 65,000 directors had managerial-level marketing experience.
Another study among board members showed only 4% believe marketing is important business experience to have (versus 47% who believe that finance is). And the thing that really shocked me was a claim from a leading academic that the reason is that “the board should focus on strategic issues … and not delve into tactical issues such as marketing”.
Marketing is more than a tactic
And therein lies the problem facing any marketer looking to be taken seriously at board level: marketing is too often associated with short term tactics and not with making a strategic contribution to the business.
There are, of course, exceptions, particularly where a business’ brand is a major business asset. But even then, if the board is not continually assessing decisions against brand values, those decisions can have lasting damage on the value of that brand. We only have to look at the litany of shocking revelations from recent and current Royal Commissions into banking and aged care.
‘Chronic ease’ is a governance failure
The most senior levels of organisations, notably boards, have become alarmingly isolated from their businesses and external audiences – or customers.
The initial Australian Prudential Regulation Authority report into the Commonwealth Bank eloquently described this condition as “chronic ease”. Boardrooms have become cosy places, with a sad lack of boat-rocking.
And if a head as seasoned as the National Australia Bank’s Ken Henry can have a brain snap, something is deeply wrong.
Perhaps the operational, day-to-day side of the business no longer has the required oversight, that people feel empowered to act without due regard to consequences. And when we consider the extent to which marketing has a seat (or even a mention) at the boardroom table, it’s perhaps no wonder that a business’ most precious asset – its brand, and thus reputation – can sometimes be the victim of well-intentioned but ill-judged actions by a board that could use some wiser heads.
That’s why boards need a strong and strategic voice for marketing. And why they must place a higher value on the marketing function.
But marketers need to bring greater quantitative rigour to the table and demonstrate the internal rate of return (IRR) that marketing can deliver.
Lawyers and accountants need to understand marketing
Marketers must also demystify the current blizzard of consumer-facing technology for the board. Boards’ suspicions that ‘shiny new object syndrome’ is rife among marketers can be well-founded. But it doesn’t mean there aren’t powerful new ways to engage with customers, internal audiences and investors.
It’s time for boards to accept more responsibility, and exercise more active authority, to ensure that their businesses are as well-protected from poor communication as they are from financial mismanagement. After all, it’s a board’s duty to protect the company’s assets, including its reputation.
This requires boards stuffed with lawyers and accountants to operate outside of their comfort zone, and realise that this fluffy marketing thing can deliver a nasty bite if you’re not careful…
Tim Parker is the chairperson of The Possibility Partnership
hi mate nice article. Ive always thought that marketers trying to learn the language of the board have got it all wrong. the board needs to learn the language of marketers. marketers look after brand thats the most important thing the company has.
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I agree Adam. Brands generate the wealth via share valuations.
But given the funds that are flowing/rushing to tactical online executions focussing on immediate sales, at the expense of the ‘slow burn’ of building a brand, I feel that marketers are more akin to sales managers these days.
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So the tradition continues. Not only do they lack decent marketing people but also IT and HR, go figure.
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Thanks, Adam. Spot on. And the marketers also have to earn their place at the table by intrinsically, and quantitatively, linking brand value to enterprise value.
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Good points. When we were looking at this we found a lot of marketers were bringing the wrong mindset to the boardroom. Marketers need to be talking insights, opportunities and return on investment, not brand and campaigns.
If marketers own the product, supply chain and customer engagement, then they need to be talking about the benefits they’ve brought to this side of the business, not the latest promotions.
I don’t think it’s completely fair to criticise the boardroom, they’ll welcome marketing when we start adding value: http://bit.ly/2Yy92qK
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Totally agree Tim, actually put it into action when I was on the board of Barker College – it was very interesting how siloed people can be and how the marketing voice brings it together to speak for the customer at all times and keep perspective on the end game.
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Pie in the sky thinking.
Study after study shows that marketers don’t get a seat at the table precisely because they don’t speak the same business language as the c-suite. The solution is to become more adept at business management and strategic thinking and NOT to insist the board starts to speak empty marketing jargon.
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Exactly
I’m afraid this article (or at least the comments below) is seriously overplaying the value marketing brings right now. I worked at a large back and wouldn’t put the campaign-led marketing team within a country mile of the real decision making.
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‘completely agree. Hence: “But marketers need to bring greater quantitative rigour to the table and demonstrate the internal rate of return (IRR) that marketing can deliver”. More empty marketing jargon simply reinforces the “lightweight” tag. Cheers
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Consumer brand = marketing
Employer brand = HR
Does your HR team have the ability to coach, guide and step in to avoid rogue hires and to ensure toxic employees do not pass their probations? Get that right and the overall brand will shine.
Social reviews of every element of your brands are highly visible online. Always makes me laugh when people quote how great Branson is at treating his workers well. Then have a glance at Glassdoor at say Virgin Money…..
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