Posts Tagged ‘succession planning’

Identifying Obstacles to Board Diversity

September 29th, 2015 | By

The final session of the Diversity Symposium at NACD’s 2015 Global Board Leaders’ Summit focused on the Report of the NACD Blue Ribbon Commission on the Diverse Board and how directors can implement recommendations from that report in their own boardrooms. Kapila Kapur Anand, a partner at KPMG LLP and the firm’s national partner-in-charge of Public Policy Business Initiatives, led the discussion with panelists that included Anthony K. Anderson, retired Ernst & Young LLP vice chair, executive board member, and Midwest and Pacific Southwest managing partner; The Hon. Cari M. Dominguez, a director at ManpowerGroup, Triple-S Management, Calvert SAGE Fund, and NACD; and Karen B. Greenbaum, president and CEO of the Association of Executive Search Consultants.

The Diverse Board: Moving from Interest to Action

As the Blue Ribbon Commission that produced this groundbreaking 2012 report observed:

[A] company’s ability to remain competitive will rely on its understanding of global markets, changing demographics, and customer expectations. Diversity is a business imperative, not just a social issue. The new business landscape will require boards to cast a wider net to find the very best talent available. As a natural corollary, the board’s mix of gender, ethnicity, and experiences will likely increase.

Dominguez noted that structural, social, and habitual barriers may prevent boards from becoming more diverse, and she offered this key advice: Don’t rely solely on the company’s CEO to lead this conversation. It’s the responsibility of every director to move the discussion forward.

So why aren’t boards as diverse as they could be? Greenbaum addressed this question by referring to data she collected via a survey of both boards and search firms. Her findings surfaced five issues:

  1. Candidate pool. Boards contended that it was difficult to find diverse candidates. Horn countered this claim by asserting that a failure to find qualified candidates is more a function of boards not searching correctly. Boards should demand that search firms provide a diverse list of candidates. Conversely, search firms take their cue from boards and expect them to be vocal about the importance of having a diverse candidate pool.
  2. Term limits. A lack of term limits results in a situation in which boards cannot be routinely refreshed with new directors. If term limits are restricting opportunities to bring on new talent, consider expanding the board.
  3. Experience: Boards resist adding members who are not current CEOs or CFOs. Boards need to be open to first-timers and should develop strong mentoring programs to bring newly minted directors into the fold.
  4. Succession planning: Build a pipeline of diverse talent in your own company so that these leaders can serve not only in your boardroom but also in those of other organizations.
  5. Status quo. Boards can become complacent about how they operate, especially when they feel no pressure from shareholders or other stakeholders to change.

“All of us must be conscious that this is a leadership issue,” Anderson said. “If the leadership of a company doesn’t believe in diversity initiatives, the ability to make much happen is grossly inhibited.” Companies with a diversity strategy that touches on leadership, employment, and procurement are reinforcing the importance of diversity as part of company culture, Anderson added..

Creating change takes time, effort, and formal processes. Putting diversity on the agenda may require a shift in thinking and habits, but, as all of the panelists agreed, diversity is a business imperative that will only grow in importance over the coming years.

Unique Dynamics, Common Issues

February 19th, 2013 | By

As NACD general counsel and head of Board Advisory Services (BAS), I’ve gained tremendous insight interacting with all types of boards from startups to the top of the Fortune 500. Each board comes with its own unique dynamics, incorporating differing personalities, skill sets, advantages, and obstacles. But despite these differences—and regardless of the size and sophistication of the board—there are several common issues with which most boards are grappling.

While I’ve seen just about every scenario one could imagine, BAS is typically engaged for the following reasons:

  1. The company has reached a turning point in its strategy, which has created tension and a need for alignment with the board and management.
  2. The board is struggling with directors’ extended tenure on the board, which has created a stale environment and an obstacle to fresh thinking.
  3. Often related to the second point, the board is wrestling with the thorny issue of succession planning and how to deal with underperforming directors.
  4. The board is composed of strong, experienced directors, but management does not feel they are as engaged as they could be and are not bringing all their skills to the table.

In each situation I’ve found that our clients, despite facing significant pressure points, all have the desire to improve. Even the most sophisticated boards are willing to admit they don’t have all the answers. As such, they bring NACD—as an objective third party—into their boardroom to assist in identifying steps for improvement.

In my next posts, I will drill down further into these common issues. How are companies dealing with underperforming directors? What new succession planning techniques are working? Does extended tenure affect director independence, engagement levels, and the creation of fresh ideas? How can the board and management team be more effectively aligned?

Wanted: A New Board Chair for the BBC – My Country Needs You

November 9th, 2010 | By

The British Broadcasting Corporation is looking for a new chair of the BBC Trust, the governing body of the organization. If you are reading this in the United States (and most of NACD’s 10,000 members will be) there is no reason for you to care about this as much as I do, but nontheless I hope you will look carefully at the job description because the UK’s public service broadcaster needs great governance as never before. Brush up on your British English and get your application in.

Here’s a primer to get you started: in the UK every household with a TV pays a fee to the government and the entire population can access BBC television, radio and online content for free and on demand. The license fee, as it is known, is supplemented by sales of programs and formats ( including Dancing with the Stars, The Office, Dr Who, Life and all of David Attenborough’s output) overseas.

In recent years the BBC has been under threat from Rupert Murdoch’s satellite and cable service which of course carries all the BBC channels. Rupert owns a lot of rights to major sporting events and he also owns the technology which beams those events into people’s homes. He charges a lot for this. People who choose to watch sport rather than comedy, drama, nature, children’s programming (yes, the BBC brought you the Teletubbies) and who pay their bill to Sky, don’t see why they should pay up if they don’t choose to watch the Beeb. This said,more than 95 per cent of the British population avail themselves of some BBC service every week – the broadcaster remains resolutely at the center of everyday life.

With the election of a new coalition government, the UK is facing public service cuts that not even Maggie Thatcher would have dreamed of. The BBC will suffer a 16 per cent cut in its income and the Chairman’s salary has taken a similar hit.

Less income means staff cuts, more repeats in primetime, and limits on the kind of technological innovation that has led to the BBC becoming one of the world’s most trusted digital guides.

This matters to me because the BBC practically brought me up. I was one of those children with square eyes, a pasty complexion and the ability to make great halloween costumes, sex a tortoise and identify the cuisine, terrain and music of all world capitals because I had seen it on TV. I learned to expect the Spanish Inquisition, and had my own silly walk. Like all Monty Python fans I knew when a parrot was an ex parrot.  All my crushes were BBC presenters and my female role models were too. They still are. 

My first job was with the BBC and I was the envy of everyone I knew for there could be no more exciting and interesting place to work. Here, I could learn faster than I could anywhere else, and each morning as I walked through the Television Center scene dock past the Tardis and the sets of my favorite sit coms (Mrs Bucket’s table for candlelit suppers, Mrs Slocombe’s shopfloor bust from Are You Being Served? and, later, Edina and Patsy’s office from Ab Fab) I felt lucky to be there and proud to be part of the BBC. I worked in the newsroom then. I didn’t last long. The BBC demands a rigor in its news services that to which I was totally unequal. Sidelined from the serious stuff, I went on to run the BBC’s daytime services and later came to the US to be part of the early years of BBC America.

I'm Proud of the BBC

I'm Proud of the BBC (video)

I still love the BBC and I am glad to say others do too. Check out this video, now something of a hit in Britain. For a slightly more upscale appreciation of the BBC services check out this promotion for the range and diversity of music featured by the public service broadcaster.

I expect the job of chair of the BBC Trust will go to a Brit, and someone well-known to the current UK government, but I urge you to think about it carefully. The BBC is worth having, and so, therefore, is this job.