A Heidrick & Struggles memo describes the increasingly complicated and important issue of board composition — and notes that too few boards rigorously evaluate their composition to ensure they’re meeting demands for digital and sustainability expertise and diverse experiences. If director recruitment is an ongoing process, boards are better able to plan ahead and “future-proof” the organization. They recommend these eight steps to better board succession:
At least annually, evaluate board composition, individual director performance, and full board effectiveness in the context of the organization’s strategic objectives and purpose.
Make sure a single person is accountable for that process (likely the chair of the nominating and governance committee) but that it is broadly embraced by the full board.
Establish benchmarks for key areas of board composition, considering peer boards or other high-performing organizations.
Map out the skills and experiences the board will need to meet its objectives for the next 5 to 10 years holistically, taking into consideration multiple directors moving on and off the board. Refresh and discuss these needs annually.
As the company’s needs change, so should the board. Board refreshment through term limits, age limits, and regular evaluations against the strategic skills matrix is key.
Develop new recruitment strategies that challenge long-held norms about the most useful networks for recruiting and the most important types of career experience. Search broadly. Be open minded. (Note – this is especially important given investors’ focus on diversity)
Build relationships now with potential future directors. Get to know them today for tomorrow’s needs.
Ensure the board is both inclusive and attractive to potential directors. Test your assumptions about what inclusivity means for your board.
-Liz Dunshee, TheCorporateCounsel.net September 4, 2020
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