Board member wanted:
The progressive boardroom moves the needle away from operating in a vacuum with targeted board recruitment for the 21st century. While turbulence is not new, its nature and degree present an ever-increasing need for executive-level acumen to capitalize on opportunities and mitigate risks in the ever-more-sophisticated business environment.
According to Spencer Stuart, about one-third of the 2014 S&P 500 board appointments had no previous public company board experience. While adding first-time directors with no board experience is a step away from tradition, the advantages can far outweigh the risks. As Einstein stated, “The measure of intelligence is the ability to change.” In a disruptive era, a progressive board prepares for and anticipates critical incidents outside of the steady state and recruits board candidates from that framework.
Drivers of Change
1. Knowledge: universally available and rapidly obsolete
2. Uncertainty: increased uncertainty and risk
3. Business environment: more global and diverse
For public companies, a few critical incident areas that can define a director search framework are:
• Strategy and Performance: changes (disruptive → crisis) that require a company to revise strategy
• Transactions: (self-initiated → takeovers) that fundamentally change a business
• Reputational Risks: (major accidents → activist investor actions) that require a stand-out response
Those that have been tested in the fires of disruption and transition show a capability for value creation in today’s world. These are “turbulent times,” and competing and succeeding in this environment requires directors to focus on what really matters and show a track record of due diligence.
If your board is considering the addition of a first-time director, here are few things to keep in mind:
• Obtain solid references from executive-level professionals who have worked with the candidate on a day-to-day basis and have intimate knowledge of their leadership competencies.
• Look for a honed ability to absorb, analyze and process a great deal of complex information to identify pertinent questions.
• Identify the skill and savvy to balance a sense of unity with openness to all relevant information that may risk a fracas from time to time.