How to Make a 21st-Century Board
How will boards find the next generation of talent—directors who will be able to maintain their companies’ competitive edge in a global marketplace? This was the question raised in the third session of the Diversity Symposium at this year’s NACD Global Board Leaders’ Summit, and it was addressed by a panel composed of Lt. Gen. (Ret.) Michael Rochelle, founder, president, and CEO of MDR Strategies LLC; Pablo Schneider, CEO of The Wider Net, a firm dedicated to advancing diversity in top leadership roles; and Caroline Tsay, vice president and general manager at Hewlett-Packard Co. and director of Rosetta Stone Inc. and Travelzoo. The panel was moderated by Andrea Hoffman, founder and CEO of Culture Shift Labs, and the discussion broke down the talent search process into three parts:
- identifying opportunities for increasing diversity,
- analyzing the impact of force multipliers in the boardroom, and
- locating these wellsprings of new talent.
Schneider observed that the most promising opportunities for increasing boardroom diversity arise where the board’s biggest knowledge and talent gaps exist. Because demographics and technological innovations are transforming companies everywhere, boards must assess not only a candidate’s skill sets and experience but also whether he or she has the mindset to oversee those transformations. Rochelle added that boards must look at disorder and disruption in order to ensure that director talents correspond to those forces. Tsay advised boards to analyze the skills of prospective directors in terms of their alignment with the company’s overall strategy.
Discussion then moved to the force-multiplier effect—i.e., how having subject-matter experts dramatically increases the board’s effectiveness by providing diversity of thought and cultural perspectives on the profiles of these candidates. Rochelle again brought up the issues of disorder and disruption, asserting that it will be impossible for boards to manage these forces if they continue to rely on traditional approaches. He also noted that an outsider’s view is critical, both because it prompts the board and the executive team to be more diligent in how they analyze day-to-day business and because it provides new insights into potential problem areas.
Tsay echoed this point, offering the example of a Rosetta Stone director who is also the CEO of a media company and who established an advisory consumer focus committee on the board in order to acquire a more granular understanding of the company’s customers. Force-multiplier talents can help boards to rethink the tools they use to reach consumers and how the board can gain an end-to-end view of the industry. “There are opportunities to get candidates with expertise, but how do you best leverage them?” Tsay asked.
Finally, the panelists discussed two key questions: who are the people best qualified to raise the company’s profile, and where can one locate these wellsprings of talent? On this score all agreed that networking is critical. By attending corporate, industry, and/or director education events, current board members will be able to meet and foster professional relationships with potential candidates.