In working with executives who are interested in serving on Boards, I always have them try to find some descriptions of actual Board seats that are in play – perhaps “specs” from a recruiting firm handling a Board search or from the company’s Board selection committee. The descriptions are useful in aligning the candidate with the needs of a specific Board and in providing some common data points that address general desirability for a Board role.
Is there a good, short definition of the purpose of a Board?
Recently, one of my clients shared with me one of those elusive “specs” from a recruiting firm. It included a well-crafted definition.
The purpose of the Board [of this company] is:
- To serve as stewards of the investment of the shareholder and other stakeholders of the company, promoting alignment and a long-term perspective
- To support and approve the strategic direction of the company to align to the vision, promote growth, and ensure stability
- To provide guidance regarding the quality, depth, and continuity of management required to attain the company’s major strategic and operational objectives
- To monitor compliance with legal requirements
How is the role of the Board evolving?
A major shift now taking place is from being a well-run governance organization to providing leadership in creating value and taking a more active role in decisions once reserved solely for the CEO. Ram Charan, Dennis Carey, and Michael Useem address a new roadmap for Board engagement in their book, Boards That Lead: When to Take Charge, When to Partner, and When to Stay Out of the Way.
What is the focus for strengthening Boards in 2017 and beyond?
According to CEO, Peter Gleason of the National Association of Corporate Directors (NACD), “the next five years will be among the most challenging periods in the history of corporate governance. The four most important requirements for Boards [and therefore for candidates] in 2017 and beyond are:
- Global experience
- Strong regulatory knowledge
- Strong cybersecurity experience
- Greater diversity”