Boards, investors, regulators, and other stakeholders are increasingly focused on the alignment of board composition with the company’s strategy – with diversity and inclusion front-and-centre. Indeed, the increased level of investor engagement on this issue highlights investor frustration over the relatively slow pace of change in boardrooms, and points to the central challenge with board composition: a changing business and risk landscape.
Addressing competitive threats and business model disruption, technological innovation and digital changes, climate and ESG risks, cyber risk, and global economic volatility requires a proactive approach to board-building and board diversity – of skills, experience, thinking, gender, and race/ethnicity.
Board composition: Ten questions to ask
01
What is the company’s strategy?
02
Where are the skills gaps in relation to strategy?
03
Does the board have the right combination of skills, backgrounds, experiences, and perspectives to probe management’s strategic assumptions?
04
Has sufficient attention been given to recruiting directors with backgrounds in academia, government, civil society, as well as entrepreneurs and those from family businesses?
05
Is the 20th century paradigm of filling boards with directors with ‘big company’ experience still relevant?
06
Is there is a robust board evaluation process that focuses not only on what the board does, but how it does it, and how it can improve?
07
How robust is your formal succession plan to achieve the ‘right board composition’?
08
Are your underperforming directors being removed in an efficient and effective manner?
09
Are matrices identifying any missing knowledge, skills and expertise being applied without fear or favour when recruiting new board members?
10
What is the leadership style of your board chair?
Access the full publication here:
