The most critical role for HR leaders in business is to serve as a trusted adviser to the CEO, according to board director Sally Herman, who said HR executives should play an important role in helping CEOs make the right decisions around businesses and people.
“The most critical role for me is that of trusted adviser to the CEO – not to the point where they are the yes person to the CEO, but if necessary they should question the CEO’s decisions around hiring and firing and provide well-balanced advice on the makeup of the executive team and strategies that will give the best chance of success,” she said.
“Every CEO needs a strategic people consultant, and that role should be played by the head of HR,” said Herman, former head of corporate affairs and sustainability for the Westpac Group and now a board director for several companies including Breville Group, Premier Investments, Investec Property and ME Bank.
“Operational HR needs to be looked after by people at lower levels within the HR function, but it is the head of HR which should really work as adviser to the CEO to make sure their team is the ‘A team’ for the next three to five years, and assist in building organisational capability to make strategy happen.”
Herman also said strategy is a much more regular conversation at board levels, and boards are taking a much stronger interest in matters affecting strategy such as changing markets, competitive landscapes, employment trends as well as management of talent and getting the right people into the right roles.
“Every CEO needs a strategic people consultant, and that role should be played by the head of HR”
“Certainly in the boards that I’ve been involved with over the past almost four years, the focus on strategy is right at the heart of what the board sees as its role. I’m sure every board would say to you our critical role, apart from endorsing the strategy, is to hire the right CEO,” she said.
“But I think now it goes more broadly than just the right CEO; I think it’s supporting the CEO to get the best team to execute against the strategy.
“So on all of the boards I sit on, we’re pretty actively involved in understanding what capabilities are required in a CEO and their executive reports to achieve the strategy.”
Conversations about talent management are a part of most board meetings, according to Herman, who noted that timeframes have also changed around having the right members of the executive team.
“When putting in new members of executive teams, there is a reorientation away from the question of whether a potential executive will stay with us for the next 10 years, to potentially three to five years before they possibly move on,” she said.
“So it’s more about how companies and individuals meet their personal and professional goals for the period of a three- to five-year strategy.”
For the full interview with Herman and story on getting HR on board, see the current issue of Inside HR magazine.