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How to Build Better Boards & Increase Boardroom Diversity

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This document provides tips for building better boards by increasing boardroom diversity. …

This document provides tips for building better boards by increasing boardroom diversity.

Learn more about EFL Associates at www.eflassociates.com

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  • 1. Building Better Boards Increasing Boardroom Diversity ©Copyright2007.CBIZ,Inc.NYSEListed:CBZ.Allrightsreserved. Angie Salmon, EFL Associates CBIZ Human Capital Services, Inc. asalmon@eflassociates.com; 913.234.1576
  • 2. 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
  • 3. 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
  • 4. 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 Entrepreneurial Customer Knowledge IPO 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
  • 5. 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
  • 6. 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
  • 7. 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