Archive for the ‘Board Composition’ Category

Diversity in the Boardroom: The Importance of Change

February 23rd, 2015 | By

For years, boards have discussed diversity but little action has been taken. Demographic shifts and the continuing focus on global competitiveness point to change on the horizon.  While it won’t happen tomorrow, all signs point to increasing diversity within the next few decades — when the current millennials are in their 50s, the boardroom will be much more racially diverse.

I recently addressed two highly engaged groups in Washington, D.C., and the attendees reflected very similar attributes and a common aspiration — a desire to gain their first board seat. My advice for gaining that first board seat was clear. It’s all about who — and what — you know.

The first group I met with was from Ascend, and the second group was from Women in the Boardroom. While the composition and mission of the latter is evident, the former may be new to you. Ascend is an association consisting of nearly 50,000 Pan-Asian leaders who are passionate about ascending the highest ranks of business. I spoke during Ascend’s recent global conference of more than 2,500 people.

NACD believes diversity is a global business imperative. I mentioned during my talks that NACD has been a champion of diversity in the boardroom for more than 37 years, dedicating content, events and actions to the issue. Further, we don’t define boardroom diversity as being simply about color or gender. It’s about diversity of thought, perspectives and experience – from a cognitive perspective.  Ideally, the skills, experiences and perspectives of a company’s directors should reflect those required to proactively oversee the company’s strategy.

For more information about NACD’s positon on diversity in the boardroom, please read our Blue Ribbon Commission Report here.

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.