Archive for the ‘Board Composition’ Category

Through the Boardroom Lens

July 25th, 2014 | By

Directors attending the recent NACD Directorship 2020® event in Denver, Colorado engaged in group discussions about how boards can anticipate and effectively respond to environmental and competitive disruptors in the marketplace.

The half-day symposium at the Ritz-Carlton on July 15 was the second of three NACD Directorship 2020 events this year addressing seven disruptive forces and their implications for the boardroom. Summaries of the Denver speakers’ main points are available here.

Following each speaker, directors developed key takeaways for boards. Those takeaways fell within the parameters of the five elements of effective board leadership defined at last year’s NACD Directorship 2020 forums: strategic board leadership and processes, boardroom dynamics and culture, information and awareness, board composition, and goals and metrics.

Environmental Disruptor Takeaways

Strategic Board Leadership and Processes

  • Crisis response plan. Ensure that the company has a contingency plan in place that takes into account a potential environmental crisis. The plan should include how the company will respond to disruptions in the supply chain and production cycle, as well as to employees, customers, and investors.

Boardroom Dynamics and Culture

  • Culture. Boardroom culture should reflect that directors are ready and willing to be held accountable for environmental or climatological issues that arise for the company.

Information and Awareness

  • Engagement. The company should have an established communications plan to use in response to requests from shareholders and stakeholders regarding environmental matters.

Goals and Metrics

  • Green metrics. Becoming a sustainability-focused company requires adopting a long-term commitment to the cause. The board can communicate that commitment by establishing environment-related performance metrics that align with the corporate strategy.

Competitive Disruptor Takeaways

Strategic Board Leadership and Processes

  • Board agenda. Set aside time on the board agenda to discuss forward-looking strategy, so that the board’s focus is not limited to reviewing the company’s past performance.

Boardroom Dynamics and Culture

  • Culture. Fostering innovation requires risk. The culture throughout the organization should support failure and risk taking within the company’s tolerances. Also invite outside experts—or “white space” teams—to help trigger new, innovative thoughts.

Board Composition

  • Composition. Board composition should reflect a diversity of thought and experience. Regardless of background, directors should be willing to ask probing questions and stay aware of marketplace trends.

Goals and metrics

  • Understanding the marketplace. Management should be able to answer who future competitors might be and what trends might gain traction.

How to Land—and Keep—the Right Board Seat

October 25th, 2013 | By

What does it take to get on a board? It’s not an easy task. Identifying, approaching, and successfully procuring a seat on the right board can be a long, and sometimes daunting, journey. This panel offered insights on the future of boardroom composition. Having a board made up of people with relevant skill sets and experience is critical in today’s competitive business environment, and boards want the best candidates available. The panel discussed the latest trends in director recruitment and how they impact the search process. It also discussed the qualifications most commonly found in successful candidates. Maggie Wilderotter, chairman and CEO of Frontier Communications Corp. and director of Xerox and Procter & Gamble, shared her perspective and experiences, having served on 23 public company boards over the last 28 years.

Highlights:
1. Boards are focusing more on succession planning—looking three to five years out for the skills they’ll need to help drive success. It’s not surprising that most board searches still focus on CEOs (which is what large-cap companies want) or business unit heads (which mid-cap companies seek). Whatever the title, the key is that person has a track record of making good decisions. What’s also notable is that the majority of directors landed on boards because they knew an influential person, such as another director, who recommended them.

2. Board search firms will often reach out to CEOs and directors to ask for the name of the best director on their board and why that person provides the most value. Often the characteristics of those “best” directors are similar. They keep the company top of mind. They are bright and have good judgment. They challenge, but do so respectfully. And they mentor management. They are also generally likeable and are easy to interact with.

3. If you’re looking for a board seat, you need to be able to articulate where you could add value. That often means focusing on the two or three industries where you believe your skills would be a great fit. And be strategic in identifying companies on whose boards you would like to serve, then make it your mission to get to know those directors. You also need to understand who else is on the board and be comfortable that you would fit with the culture and values.

Speakers:
Robert E. Hallagan
Vice Chairman & Managing Director, Board Leadership Services, Korn/Ferry International

Maggie Wilderotter
Chairman and CEO, Frontier Communications Corp.; Director, Xerox, Procter & Gamble

This summary provided by PricewaterhouseCoopers.

Follow the Leader: The 2020 Chairman/Lead Director

October 18th, 2013 | By

Leadership is crucial amid today’s rapidly changing governance landscape. This panel discussed what it takes to head a high-performance board. With boards currently facing unprecedented challenges, having the right lead director in place is critical. The right leader can guide boards as they confront new challenges and deal with their normal oversight responsibilities. It’s important for boards to focus on strategy and innovation while minding regulatory and compliance matters. It’s also important to align strategy with the right performance metrics and ensure that independent directors are fully up to speed on the company, the industry, and key competitors. As we think about where all boards should be in 2020, they should strive to achieve high-performance.

Highlights:
1. Boards should have an independent, strong, effective leader with the right skills. The process to select the board chair should be as rigorous as the process for selecting the CEO.

2. The chair should set the board’s vision and key objectives. Directors should be held accountable for this vision.

3. Boards should have a rigorous performance evaluation process. The process should include understanding the challenges the company is facing and aligning board skills with these areas. Directors need to ensure the composition of the board reflects fresh skills and insights, and each director should earn the right to be on the board.

Speakers:
Robert E. Hallagan
Vice Chairman & Managing Director, Board Leadership Services, Korn/Ferry International

John A. Krol
Chairman, Delphi Automotive; Director, Tyco International

This summary provided by PricewaterhouseCoopers.