Boards without marketers risk getting bitten by a reputational disaster. And the risk is high because most boards lack anybody with a marketing background. Businesses need to realise the value marketers bring to the (boardroom) table, argues The Possibility of Partnership’s Tim Parker, for Mumbrella.
Tim writes, “I went to a seminar recently for those interested in becoming a boardroom non-executive director (NED). 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…
Written by The Possibility of Partnership’s Tim Parker, this article was originally published on Mumbrella, 20 May 2019.