Recruiting for the Future
As highlighted in this week’s NACD Directors Daily, boards are responsible for the oversight of an expanding set of risks. This is especially true in the realm of information technology. This week it was reported the Apple board of directors was asked by its shareholders to provide a report specifically on its process for overseeing privacy and data security risks. On the other side of the IT spectrum, the Wall Street Journal recently highlighted the use of social media by those in the senior ranks.
While leadership experience is still the most sought after skill in recruiting new directors, according to data from the upcoming 2012-2013 NACD Public Company Governance Survey, boards are increasingly searching for directors with skill sets beyond “financial expertise.” In recent years, however, boards recruiting new directors have cited a stronger need for risk and technology experience.
Board composition was a key topic of discussion at the recent meeting of NACD’s Nominating/Governance Committee Chair Advisory Council. Last week, Fortune 500 nominating and governance committee chairs met with representatives of key regulators, institutional investors, and proxy advisory firms. At these meetings, co-hosted with executive search firm Heidrick & Struggles and law firm Sidley Austin, committee chairs are able to discuss expectations with these key regulators, as well as share how their boards are handling the current and future boardroom practices. Council delegates spent a substantial portion of the meeting discussing how to design board composition to meet future strategic imperatives, including the increasingly diverse marketplace, and to address cybersecurity and social media risks.
Following an update on regulatory activity and an analysis of the 2012 proxy season, the conversation shifted to the importance of communications between the board and shareholders. In light of rules such as say on pay and the ability for proxy access via shareholder resolutions under Rule 14a-8, it is critical that the board make greater use of public disclosures to communicate the company’s story. If necessary, directors should also consider supplemental disclosures if they feel that additional information needs to be communicated to investors.
NACD will issue a formal summary of the meeting, reviewing the data and insights gleaned from those present.