Overseeing a company’s corporate governance process and structure, the nominating and governance (nom/gov) committee is essential to a company’s long-term success. In this BoardVision interview—moderated by NACD Director of Partner Relations and Publisher Christopher Y. Clark—Bonnie Gwin, vice chair and co-managing partner of the global CEO and Board Practice at Heidrick & Struggles, and Thomas Bakewell, CEO and board counsel at Thomas Bakewell Consulting, discuss the qualities of an effective nom/gov committee chair:
Sets the right mix between board culture and composition
Facilitates cross-committee communications
Performs effective board evaluations
Spots diverse talents in director candidates
Bonnie Gwin, vice chair and co-managing partner of the global CEO and Board Practice at Heidrick & Struggles (left) and Thomas Bakewell, CEO and board counsel at Thomas Bakewell Consulting.
Here are some highlights from the discussion.
Christopher Y. Clark: Depending on what your definition of best is, why should the best director on the full board be the chair of the nom/gov committee?
Bonnie Gwin: In my opinion, it is an incredibly critical role. You’re talking about a director who is helping guide the board in not just developing a great composition for the board that is strategic and focused…, but also a director who understands the culture of the company and the board that they’re trying to build. You really need an outstanding director who understands that mix between composition and culture and can work closely with the board to get it right.
Thomas Bakewell: Bonnie is spot on in terms of composition and having the right team around the table. The other magic that you need in a terrific nom/gov chair is somebody who can draw people out, spot talent, make sure everybody gets heard, [and] really…build the team. Coming from a baseball town where we have a pretty good manager [who] wins a lot of World Series, we know the value of having a great person who can draw everybody out and get the team to work together. It’s really [about teamwork] … and using a lot of the tools that are available today. One of the trends in tools is…much more thorough and in-depth evaluations. [These are] … not just check-the-box or check-the-list [exercises] but in-depth individual board evaluations to know what’s really going on in the boardroom and among directors.
Clark: NACD [held] a combined meeting of the NACD Audit Committee Chair Advisory Council and NACD Risk Oversight Advisory Council. … It was invaluable for both sets of committee members. How do you feel about [meetings between committees] … whether it’s audit and risk [or] compensation and nom/gov? Do you think those interrelationships of committees should be enhanced or promoted?
Gwin: Generally speaking, transparent communication across all the committees of the board is essential. It’s essential for a high-functioning board. And in particular where you have, for example, [the] nominating [and] compensation [committees], there’s a lot of interplay between them and the issues they’re addressing. I think it’s important to ensure that there [are not only] good transparent lines of communication between those two committees, but frankly across the whole board.
Bakewell: The magic ingredient is how people work together, and part of that key element is how they communicate. The old approach to boards was everybody showed up the day before the board meeting [and] went to the committees. A lot of times people went to every committee [meeting]. What’s the point [now]? You don’t have the time. You don’t have the energy. You don’t have the resources today. So how do you have a board where everybody trusts each other and they communicate? If you’re not on the audit committee and important issues come up…, can you simply pick up the phone and reach out to the audit committee chair, or is there another process that’s very helpful for you to get the information you need?
Clark: Please give us one last piece of wisdom.
Gwin: The piece of wisdom I would share is the importance of long-term succession planning. We’ve talked about that several times, but I really think, looking at board composition [and] board dynamics… over the next four or five years…is very important.
Bakewell: I would say my secret sauce is [that when looking at director candidates] it’s not so much [looking at] … particular talents, [because] everybody can look at a resume and see what somebody has. They’re going to see if they’re a CEO, [or] they’re skilled in marketing. The real magic is [asking], “What is their true personality? Are they a ‘driver’ personality? Are they a curmudgeon?” Sometimes boards need curmudgeons. … Is somebody a strategic thinker, or is their skill set not [being] a strategic thinker but taking strategy and converting it into action? What have they done in their past experience that really makes them qualified for this role?
Clark: Well I think we’ve got all the synapses popping. I wanted to thank the both of you for joining me today.
Ensuring that your board is broadly diverse—in every sense of that word—can and most likely is impeded by unconscious biases. The NACD-hosted Diversity Symposium yesterday opened the 2015 NACD Global Board Leaders’ Summit in Washington, D.C., with presentations from Judith Williams, global head of diversity at Dropbox, and former manager of the global diversity and talent programs at Google, and Howard Ross, founder and chief learning officer of Cook Ross, a consultancy that works specifically on inclusion issues.
Google, which lives and dies by data, wanted to understand where bias might exist in key decision-making processes so started its unconscious bias program in 2013. Google researched whether training was effective in helping employees mitigate unconscious bias, Williams recounted. One example: For interview processes, Google developed a tool that would generate questions based on role-related knowledge, leadership, and “Google-y-ness.” Questions such as, “Describe a situation where you went above and beyond to help a colleague” was a better gauge of that quality than asking “Where did you go to school and what is the highest degree that you have?” The question generator also created a rubric for rating the questions so that the interviewer would know what a great response looked like. To level the playing field even further, all candidates were asked the same slate of questions.
The question directors should ask themselves, said Ross, is not “is there bias?” but rather, “What biases do we have that keep us from making choices counter to the values that we say we believe in?”
In a business context, bias comes into play when looking at a candidate’s qualifications for a particular job. Here, the trick becomes looking beyond traditional qualifications that maintain the status quo, venturing out to find new, unique qualities that a candidate can bring to a role. For example, seeking candidates with a college degree is a standard criterion; however, this would mean that talented innovators like Steve Jobs or Bill Gates would never be called in for an interview.
Organizationally there are two things that companies can do to overcome making these snap judgments.
Education. From the top down, everyone in an organization needs to understand the myriad distinctions among people in the workplace and the mechanics of unconscious bias. By keying employees in to how people think results in more egalitarian behaviors across the organization.
Systems and structures: Closely examine company processes to discover how they are susceptible to unconscious bias. For example, look at how are resumes collected and screened. Before they go to a hiring manager for review, could names or other markers be removed so as not to trigger biases? Also, look at where breakdowns in the company’s various systems can and do occur.
Williams also stressed that, when thinking about problem solving, consider who is asking the questions. For example, Google was designing mobile products for state-of-the-art smartphones; however, in developing parts of the world where mobile device use is high, those users are not working with high-end equipment. In other words, Google was missing a substantial portion of a potential consumer base. Now the company operates on the idea that its next billion users are not going to be exactly the same as its last billion users, and figuring out the characteristics of this evolving consumer base requires innovative and free flowing dialog. Business leaders in both the C-suite and the boardroom need to identify and overcome their unconscious biases because if they fail to bring a variety of perspectives to the table, no one will be asking the kinds of questions that will lead to the next big business opportunity.
Jesse Rhodes is the associate editor of NACD Directorship magazine.
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.