how to build better boards& increase boardroom diversity
DESCRIPTION
This document provides tips for building better boards by increasing boardroom diversity. Learn more about EFL Associates at www.eflassociates.comTRANSCRIPT
Building Better BoardsIncreasing Boardroom Diversity
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Angie Salmon, EFL Associates
CBIZ Human Capital Services, Inc.
[email protected]; 913.234.1576
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
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
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
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
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.
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)