'People and culture play a pivotal part in organisations achieving their strategic objectives'
Corporate boards have come under increasing scrutiny in recent years due to their imbalance in male and female composition.
As of November 2021, the Australian Stock Exchange reported that women make up 34.3% of ASX boards, and comprise 41.8% of new appointments.
There are currently no ASX boards without at least one female director.
While the balance is slowing turning, the make-up of a board has always consisted of predominately business people with a lawyer and a finance specialist amongst the two essentials.
But the call for human resource directors to join is getting louder.
With companies facing increasing compliance on a wide range of work-related issues, having someone who is at the forefront of dealing with people on a daily basis can only help boards formulate more relevant policy and be aware of the pressing issues a business faces from a human perspective.
“In today’s environment, people and culture play a pivotal part in organisations achieving their strategic objectives,” Désirée Pascual, chief people officer for Headspace App, said.
“Human capital is the spine of any organisation and few other functions encompass the wide remit that human resources undertakes. This positions human resource leaders to lead and augment strategic conversations around growth and strategy.
“While human resources are often pigeonholed as a supportive function, they are, if engaged fully, uniquely positioned to prepare our businesses for the future, given their broad insight across the organisation and the ever changing social and regulatory landscape.”
With Gen Y and Z moving around from job to job, individuals wanting to work when they want from where they want, and legislation encompassing the ‘individuality’ of society, companies’ have their work cut out trying to keep up and simply run the business.
“Human resource leaders, by necessity, have to stay close to the ever changing moral and social imperatives, and stay informed of the ever-changing regulatory Australian landscape,” Pascual said.
The advocacy for boards that have a committee focused on culture and people strategy has dramatically increased over the last three years, she said.
“This also makes financial sense: PwC reports that up to 85%, hence the largest investment a company makes, ties back to talent. The rising strategic importance of human capital management has made it a focus area that calls for representation at all levels of the organization, including at the board level.”
With HR under-represented in the boardroom, businesses are missing out on the benefits of a “strong, constructive and authentic culture,” said one expert.
Achieving sustainable strategic priorities and financial performance goals requires a focus on the workforce, organisational culture, and employee experience, according to Georgia Henry, CEO of Henry Reed, organizational culture consultants.
“To ensure a balanced and effective approach to realising these benefits, it is important for the company to have a human resource director on the board. This ensures that the perspectives of the workforce and the impact of decisions on employees are considered, leading to sustainable success for the organisation.”
HR professionals have expertise in talent management, employee engagement, and organisational culture, she said, which are critical to achieving business objectives.
“A human resources director on a company board can bring valuable insights and perspectives related to the organisation's workforce.
“Having a human resources director on the board can also help ensure that the organisation is meeting its legal and ethical obligations related to labour laws, workplace safety, and diversity and inclusion.”
