The rise of shadow boards

You can’t teach an old dog new tricks. Maybe that’s true for dogs, but when it comes to executive boards it’s definitely not.

Shadow boards, a growing trend that sees a non-executive board of junior employees consulted on business decisions, is a commercially advantageous and engaging tactic that many firms are now looking to implement.

​

What is a shadow board?

Shadow boards are when you bring younger, non-executive employees together to form an advisory board that offers opinions and insights into strategy and other issues impacting the firm. Typically, members are selected from across the firm covering different functions, levels and diversity. The idea is to tap into a different way of thinking and use that to drive strategy.

With the average age of FTSE 150 board members creeping up to 60.9 for non-executive directors and 54.9 for executive directors, there’s a real concern about the gap between senior management and younger talent.

Shadow boards allow younger employees to feel included, consulted and engaged while giving management a sounding board.

For shadow boards to be successful, it can’t just be lip service. There has to be buy-in from leadership with a commitment to listen and action the shadow board’s suggestions.

With conscious quitting on the rise and employees wanting to feel more than just a number, shadow boards can be a really effective method of proving the weight placed on junior team members' opinions.

​

Shadow boards in action

While shadow boards aren’t a new initiative, they’re becoming more popular. For example, KPMG International successfully created a shadow board called the Millennial Board in 2018 which evolved to the Next Generation Council (“Council”).

Shadow boards can help accelerate change, a global accountancy company credited their swift decision-making and robust response to Covid-19 to the existence of their shadow board. The firm treated the board as an essential part of its decision-making process and acted on its recommendations.

It’s likely that over the next few years we’ll see more examples of shadow boards driving change and firms reaping the commercial benefits as a result.

​

Why use a shadow board?

The use of shadow boards highlights fundamental differences in the perception and implementation of management and leadership. Gone are the days of “do as I say” and instead we’re finding ourselves in a more consultative, open, collaborative style of leadership. Which is not only beneficial for the junior members of the shadow board but the firm itself.

Nicholas Donnelly, Manager in EY Consulting’s Workforce Advisory arm and Co-chair of one of the firm’s shadow boards said “It’s an opportunity to collaborate across teams and use the shadow board as a sounding board to make sure that decisions are informed by what people are feeling and thinking.

You want the environment that you work in to be the best possible, you have ideas on how that could be and the shadow board is a vehicle to capture that and bring it into a structured bit of feedback.”

What’s clear is that the success and benefits that come from a shadow board, stem from how firmly it’s embedded in the firm. When a board is empowered, and demonstrated it’s not just lip service, the advantages make themselves known.

​

Engagement

Employees and job seekers want to work for an employer that is proactive, that shares their values and that takes action. Shadow boards demonstrate all those qualities. Helping firms recruit talent but then keep them engaged, offer new opportunities and retain them for the long haul.

​

Development

With most boards being run by Gen X, having direct feedback from younger generations could be a game changer. Gen Z typically has different expectations and attitudes to work than their Gen X managers.

One hurdle faced by junior employees is how to gain the necessary leadership experience to progress in their career. Shadow boards provide a useful stepping stone to help them gain wider experience and take that next step in their career.

KPMG reported that members of the Council benefited personally through the increased visibility, which boosted their career opportunities within the organisation.

Shadow boards also allow different approaches to be heard, that’s particularly critical for firms targeting a younger demographic. For ageing boards this form of reverse mentoring can bring key insights and aid their own development and knowledge.

​

How to establish a successful shadow board

Those that have used shadow boards sing their praises but it doesn’t come without planning. They aren’t something you can decide to do on a whim, they need robust planning and integration into the business.

Here are some tips to get started:

​

Clear definitions and ways of working

It’s essential that everyone in the firm understands the role of the board, how it will operate, its reporting line and responsibilities and its composition. There needs to be absolute clarity and transparency around its workings to bolster trust in the process.

This means a clearly outlined way of working, definition of its role and responsibilities along with a commitment from leadership. Unless all of this is in place, you’re setting yourself up to fail.

Commitment

If your firm is going to use a shadow board, then use the shadow board. It can’t be a tick box, or a surface level show of engagement. The board has to be empowered with real information and opportunities for feedback, whether that’s positively or negatively. That takes a serious commitment to listening to what’s said, implementing what’s appropriate and taking real action.

Flexibility

For firms who are set in their ways and not willing to make adjustments, shadow boards aren’t for you. For those firms who are willing to be flexible, to make adjustments and to act on feedback then a shadow board could work. They do require flexibility from the business, and that’s not always easy.

Representation

One of the advantages of a shadow board is they can be more diverse than traditional executive boards. When you’re thinking about membership of your shadow board, look for opportunities to engage with a range of people within the firm, those might not always be the ones who speak up first. Instead looking for opportunities to engage traditionally underrepresented groups on the board will result in more diverse, innovative and impactful feedback.

It’s clear that shadow boards bring huge benefits when they’re used effectively. Diverse thought, employee engagement, commercial advantages - they’re all important in a successful business.

The danger of shadow boards is when they aren’t embedded fully in the firm and become lip service. In those instances they do more harm than good.

When shadow boards are working well, employees feel empowered, engaged and involved - that’s when the magic happens.

Before you pitch a shadow board to your executive board there’s research and thought to be done about how it will operate in reality to make it an essential part of the business, not just a tick box.​