Next director: Five key traits for the nominating committee
Now that the worst of the financial meltdown seems to be behind us and we begin conversations around modernizing our current form of capitalism, boards may begin to contemplate this new normal and the need to add directors to the slate.
Recently, I was in a conversation with Bill Guy, founder, chairman and CEO of Cornerstone International Group - one of the world's leading consulting organizations with approximately 100 offices in key markets on six continents. His comments centered around the idea that director selection globally tends to be influenced by a shallow process that is often emotionally based in a human tendency to judge a book by its cover.
"Drivers for director selection should be outside of credentials," he said. "The Ivy League candidates are highly overrated. They tend to be heavy on ego - an ego that has a hidden cost and zero return. We can no longer afford the mediocrity of those whose fail to recognize their weaknesses. Boardrooms need people who are curious and can lead productive, intensive debate around strategy and risk."
These comments caused me to ask myself, what drivers might make a short list for a nominating committee to consider? Here are my five traits for this new normal:
The next Ivy League is from a tempered American-Centric league:
America's identity as the most powerful capitalistic market in the world is diminishing. Today, capital is far more available, enabling a number of countries to develop their own version of free enterprise - efficiency combined with some degree of freedom. Think China and how it has converged ideas, resources and money around the clean energy sector. As this trend continues, the next defining wave of institutions, prosperity and technology will be outside of the US, be more disbursed in nature and come with its own set of ups and downs.
The next Ivy League is from a Worn-Ready league:
Candidates with cross-cultural M&A or strategic alliances who have actual experience in business transactions and have gotten their fingers burned will come to the table with keen insights and be more alert. Those that have experienced failures rather than a star-power name have battle-won smarts that far outweigh what is often 10 years of a one-year experience repeated nine times over.
The next Ivy League is from a We-Centered league:
The next round of leaders must be skilled at the ability to find that balance between benevolence and profitability. Like it or not, as governments fail to fulfill people's needs, the 21st century boardroom will be faced with this job. Knowing how to work within the tensions that come with the "haves" and "have-nots" is key to public company success.
The next Ivy League is from an Ego-Equilibrium league:
With the relationship of trust and consumers' purchase decisions on the rise, the ability to look beyond one's self and know the difference between self-regard and self-importance will provide the openness for change and flexibly that translates into competitive advantage for the long-term. This is a brilliance that does not need to be showcased.
The next Ivy League is from an Ambassador league:
Candidates with contextual intelligence of the intersection of government, business and culture on a global basis will come to the table with seasoned judgment on collabration and the risks and rewards of international business. The trend toward resource nationalization, as well as many countries owning and operating large entities, fuels the need for decisive insights that navigate to the upside of turbulent environments with a strategic agility that builds shareholder value.
Today, the drivers of turbulence - rapid diffusion of technology, increased interdependence across markets and frequency of economic shocks - are driving the demand to retool boards. To create competitive advantage, it will take leaders with a proven agility - an "on the ground" smarts built from experience over a staid, lettered approach, nourished by libraries and formulas.