Having a global perspective – or at least someone on the board asking the right questions relating to global changes – is critical for today’s companies. Major international demographic changes are taking place in the U.S. and around the world. These changes impact how we do business and where our opportunities and challenges are.
At a recent gathering of corporate directors, many questions were raised about “the global question.”
About who in the boardroom is raising the questions, and do we have the range of skill sets, experiences, and backgrounds necessary to address these changes in the competitive environment?
Is someone asking what our crisis communication plan is? The plan needs to be developed well before a crisis in order to be out in front of the social media avenues, delivering the message concerning the crisis.
For insights on how former Exxon Mobil director Reatha Clark King and former ConocoPhillips chairman and CEO Archie Dunham handled major crises at their companies, view NACD’s webinar (complimentary for NACD members); for more and for sample plans, see NACD’s Board Leadership for the Company in Crisis, (full disclosure: I co-authored this publication).
If we are to protect the reputation of the company, we can’t be the last to get the message out. Changes in criteria for board leadership to meet today’s challenges can be overlooked as well. We need to look carefully at the challenges and opportunities in our current and future environment, our short-term and long-term strategy, and ask ourselves whether the right people are at the table to meet those challenges. Click below to see a quick video about how NACD’s Board Advisory Services can help your board meet global (and other) challenges head-on.
The panel was composed of the experienced and knowledgeable co-chairs of the Report: Dennis Beresford, director of Fannie Mae, Legg Mason, Kimberly-Clark, and NACD; and Michele Hooper, director of UnitedHealth Group, AstraZeneca, Warner Music Group, PPG Industries, and NACD.
The regulatory environment has dramatically changed for the audit committee, since the Report was last updated in 2004. In response, NACD commissioned a rewrite of the Report, which is already a top seller. According to Mary Pat McCarthy, “clearly, [this] one report will benefit all.”
Beresford stressed that while the Report is not a “guide to audit committees,” it provides invaluable guidance on leading issues, such as: the audit committee’s responsibility in risk oversight, the relationship between the audit committee and the internal and external auditors, and setting the agenda.
Today’s luncheon session, “Globalizing the Board,” featured Ambassador Susan Schwab, former U.S. Trade Representative. Her overarching message to conference attendees? Building the right board means bringing a “global mindset” to the table.
“Why should you care” about globalization? Ambassador Schwab pointed out that “ninety-five percent of the world’s consumers live outside of our borders.” Boards need more than “token representation” of international individuals on the board. It also requires global literacy and “a strong international I.Q.”
The Ambassador then discussed a series of questions boards should ask themselves in evaluating their global I.Q. These included:
Do you have a sense of future and current prospects tied to global markets, i.e., partners, manufacturers, suppliers, distributors, etc.?
Do you know how to protect your intellectual property abroad?
Do you take advantage of U.S. assistance in doing business abroad?
As the Ambassador stated: “Access to global market trade is crucial” to our country’s economic future. Corporations must be prepared with knowledgeable boards ready to provide guidance in the international marketplace.