Too many boards today are filled with generalist independent directors. Most likely members are drawn from the company’s home country, have similar career backgrounds, and are overwhelmingly male.
Companies wanting considerable growth need to examine whether their boards and leadership really have the range of experience, perspectives and expertise to master and thrive in the demands of today’s fast-changing economic environment and whether they can advise management, access risk and create value for their shareholders. I read about a Fortune 50 company that annually asks each board member to nominate five other directors they feel need to stay on their board. Directors that make no lists are removed. A clear message to board members – contribute, or you’re out!
What would happen if you apply this rule to your board? What can your board do to lead the pack? Research shows that the key lies in strengthening board diversity and finding talent from a much wider pool that align with the strategic direction of the company. Boards made up of these differences lead to collaborative tension. It creates space for different points of view, fewer unspoken assumptions, less ‘group think’, and a greater likelihood of innovation.
What strategies can lead to increased diversity and in turn be your competitive advantage? A great strategy would include: a formal structure (committee) that prioritises this goal; profile analysis of board and individual board member needs; headhunting calibre of board member needed; clear and specific board goals with progressed measurables; support in form of ’board-management buddies’; and director evaluations and celebration of successes.
What is imperative is that the wider pool of talent needs to include previously non-potential board-ready individuals, which are tomorrow’s decision-makers, today’s consumers, entrepreneurs and young tech gurus. Social tool specialists, trendsetters and followers, globalisation, corporate and environmental responsible focused candidates can bring a lot to the table at your new board meeting. Consider the potential candidates experiential, demographic and personal attributes and the combined attributes guide the perceptions of these individuals and can make very interesting board-value adders. Boards are at their best when there is a diversity of culture, thinking and perspective and when the status quo is challenged.
Author: Stanford Payne CA(SA) is an ICF-accredited executive and business coach