I recently returned from San Francisco, where we held our first of four Diversity in the Boardroom events during 2012. The enthusiasm around this topic was infectious, and it reminded me of what NACD has been focused on for the past 35 years—creating strong, effective and efficient boards of directors.
While this topic is not new or unique for NACD—NACD has written numerous Blue Ribbon Commission research reports, white papers and handbooks over the years on almost every key process confronting boards—this topic is unique from an action and orientation perspective.
Without a doubt, nearly every director and aspiring boardroom leader I meet with during our programs agrees with the need for diverse, well-rounded boards of directors. One may or may not completely endorse the reports from Catalyst and other organizations regarding gender, race or ethnic diversity, but everyone does understand the need for true diversity in the boardroom.
True diversity in the boardroom comes from range of thought, background, perspectives, experience and skill sets. Framing this topic in this context unites the energy and passion around this topic.
So where do we go from here to realize the vision of diverse boards? NACD developed a five-point action plan last year during our Diversity in the Boardroom events called “Moving the Needle” to support this opportunity:
Nominating/governance chairs and committee members and professional search/recruiting firms: Expand the definition of the “typical director.” While most boards seek CEOs of publicly traded companies, companies are restricting the number of boards their CEOs can sit on in addition to their company.
Current directors: Every director should mentor and support the development of an executive who thinks, acts and looks differently than you do—not to create conflict, but to bring different views and skills into the boardroom.
NACD: Support the development of aspiring and current directors within the context of leading (and next) boardroom practices, diversity and the current environment.
NACD: Provide networking opportunities for aspiring diverse directors to connect with leading directors, and supplement their learning and mentoring.
NACD: Conduct research to document the power of diversity in the boardroom.
With a supply of qualified, diverse board candidates, developed and augmented via the above five points, boards can move the needle.
I hope to see you during NACD’s remaining three Diversity in the Boardroom events during 2012:
Solange Charas is the president of Charas Consulting, Inc. and a senior-level human capital professional with 20-plus years of experience as corporate CHRO and consulting firm practice director. She is currently pursuing her doctor of management at Case Western Reserve. She has served as the chair of the remuneration committee for a NASDAQ-traded company.
There was an absolute buzz in the room when I joined the NACD Directorship Forum held in NYC May 23-24. Apart from the normal energy of New York City, there was a special quality in the air at the start (and continuing throughout) the one-and-a-half day event.
Maybe it was the grand opulence of the West Lounge of the Metropolitan Club where we sat surrounded by gilt cherubs who looked down from soaring ceilings, reminding us to be angelic in our dealings. Or maybe it was the opportunity to forge connections and relationships with close to 200 NACD members and staff attending the meeting. Whatever the reason, it was energizing and exciting.
The conference started off with multiple peer-exchange sessions. Each table had a discussion leader who facilitated a conversation between directors on topics from Executive Compensation to Board Building to Litigation and Liability to a topic called “How Boards Get Into Trouble.” Of course, that’s the table I joined!
Artfully led by Jeffrey Rudman of WilmerHale, this was an extraordinarily interesting conversation on risk, class action suits and accountability, with voices representing the boards of public and private sector companies and non-profit and for-profit organizations of all shapes and sizes. The consistency of the issues faced by all at the table, each representing very different organizations, was notable. Also significant was the level of engagement of all participants at the table. Asking questions and generating awareness of the importance of “tone at the top” was offered as the key component to achieving consistent messages in the organization. Topics like values, impartiality, integrity, and sensitivity to shareholder optics were considered vital for excellent board and company performance.
The second peer exchange I attended explored Executive Compensation and was facilitated by a former colleague of mine from Hay Group – Irv Becker. While more technical in nature, this session also generated great dialogue. There were more “advisors” at this session—professional service firm representatives who shared interesting perspectives and anecdotes about their current client challenges. The “usual suspect” topics were covered: CD&A accountability, Dodd-Frank impact on disclosure, and a general discussion about performance-based pay optics.
An interesting observation at this peer exchange was made by a new-to-the-boardroom director who questioned the validity of ISS and other rating agencies. The conversation then became very focused and there was consensus from directors that they disliked the power of ISS as it influenced their actions and decision making in the boardroom. The folks around the table felt it shifted the focus from what’s good for the company and shareholders to “What do we have to do to placate ISS?” One participant said that the influence that outside agencies have on corporate governance is “huge” and perhaps “ridiculously inappropriate.” After this declaration, I was curious as to how others felt. At least six directors voiced a consistent message—some with more passion than others—that they feel a high level of frustration with ISS. Here’s an opportunity to explore and dialogue on how to adopt strategies that address stakeholders and ISS through good governance. Over to you…
To take part in the upcoming NACD D100 Forum at the Waldorf Astoria, NYC on November 8-9, 2011, click here.