The DNA of Your BOD is Changing
If you need your roof repaired, you don’t call a dentist, you call a roofer. If you need tax advice, you don’t call a manicurist, you call a CPA. So, why, as Boards are having to pivot to handle more than CEO compensation, are they not bringing on Directors with the needed skills to be effective in today’s ever-changing environment?
In today’s corporate world, Boards are increasingly involved in cyber security, diversity, equity and inclusion (DEI), Environment, Social & Governance (ESG) and communications. Gone are the days when the board looked like our Founding Fathers – old, white men, with the same pedigrees – Ivy-league educations, country club memberships and some C-level title following their names.
In some cases, the change is a result of legislation. [In the last two years, California has enacted laws requiring public companies to have at least one woman on their boards as well as members from underrepresented communities.] But in many cases, the changes are being demanded by shareholders and, to be honest, common sense.
Technology changes practically at the speed of light. Having someone on the Board who understands cyber security and innovation is essential.
Climate change is a global issue that every company (with or without a board) is having to address. Having someone on the Board who understands environmental and social issues is crucial. Are the Board’s decisions in line with the company’s ESG goals?
And communications…in past eras, the Board communicated solely with the CEO. Directors are more and more involved in how decisions are communicated internally (employees) and externally (shareholders, media, investors, suppliers, government.) Though many CEOs are adept communicators, that’s not true across the board. Allowing just any board member or C-level executive to craft or deliver the message is akin to having that dentist repair your roof.
Invite that major investor to serve on the Board. And, sure, the founder/former CEO can have a seat too; he/she is important in understanding where the company has been. But, if you want to move forward in this economy, if you want to propel the company into the future, make sure the DNA of your Board of Directors includes more than a CEO, CFO and JD. Add someone with ESG expertise. Add someone who is not just diverse in ethnicity or gender but who has experience managing DEI issues. How about a CISO? A Chief Information Security Officer will help make you aware of cyber risks, protect you from security breaches and guard your intellectual property.
And for a Strategic Communications executive, don’t look solely within your own industry. A good communications professional has the skills to cross industries – whether its biotech, consumer brands, energy – the skills are transferrable. He/She can tell a story, craft a message, deliver talking points, look for traps, but ultimately protect your company reputation. And, after all, isn’t that the Board’s bottom line? Take a look at your Board’s DNA – what needs to change?
