how to build better boards& increase boardroom diversity

Building Better BoardsIncreasing Boardroom Diversity

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Angie Salmon, EFL Associates

CBIZ Human Capital Services, Inc.

asalmon@eflassociates.com; 913.234.1576

asalmon@eflassociates.com

Board Composition - Diversity

• Boardroom diversity is progressing slowly

• Customer demographics ≠ director diversity

– 73% of Fortune 500 directors are white men and four of five new board appointments are filled by men (2012)

– 16.6% Fortune 500 directors are female

– 13.3% Fortune 500 directors are minority

Catalyst, “Setting the Record Straight.” 2012

Alliance for Board Diversity. “Missing Pieces: Women & Minorities on Fortune 500 Boards” August 2013

asalmon@eflassociates.com

asalmon@eflassociates.com

Board Composition – Succession Planning

www.cbiz.com

• Plan for vacancies and retirements

• Determine preferences rather than replicating background of

departing directors

• Consider long term company strategy and emerging trends

against the current and future board composition

– Global experience

– Social media

– Big data

asalmon@eflassociates.com

asalmon@eflassociates.com

Board Composition Matrix

www.eflassociates.com

Director/Candidate

Critical Requirements Preferred Attributes Totals

Cultural/Gender Diversity

Financial Expert (Audit Chair)

Industry Operations

Social Media EntrepreneurialCustomer

KnowledgeIPO Experience M&A

Sales/Business Development

Total Critical Overall Total

Illbe There     1   1     1   2 3

Justin Case   1 1     1   1   3 4

Helen Back 1 1     1   1     3 4

Ima Example 1         1     1 2 3

John Doe   1               1 1

Brian Melby   1               1 1

Jack Nimble 1             1   1 2

Industry, financial, and operational expertise cited most often

asalmon@eflassociates.com

asalmon@eflassociates.com

Think Broadly About Requirements

www.cbiz.com

• Boards often seek C-level experience at public companies or previous board experience

• Forward-thinking boards consider skills/experience - not just titles

– Only 1% of Fortune 500 CEOs are African American

– Only 4% are women

• Considering first time board members will enhance the diversity of the pool

Clark, Dorie. Forbes Online “Why So Few Women and Minorities…” 9/2013

asalmon@eflassociates.com

asalmon@eflassociates.com

Identifying Diverse Candidates

www.cbiz.com

• Work with a search firm

• Network – Get referrals outside of the current board

• Utilize resources aimed at corporate director diversity

– Women Corporate Directors

– NACD

– Local Resources

• Identify “experts” in the areas of importance – financial, media, customer, etc.

asalmon@eflassociates.com

asalmon@eflassociates.com

First Time Directors• Orientation needs to prepare new directors for more

immediate impact

– Complete immersion via presentations/meetings with corporate

leadership, site visits, provided board material

– Consider a mentoring relationship with a long-standing member

• Continued director education is critical in dynamic business environments

– Director education programs cover corporate governance,

compliance and industry trends (NACD, universities, seminars)

asalmon@eflassociates.com