By David A. Nadler
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Extra resources for Building Better Boards: A Blueprint for Effective Governance
Define the individual attributes that you want all board members to demonstrate—independence, business credibility, confidence, courage to raise challenging issues, ability to manage one’s ego, for example. INDIVI DUAL ATTRIBUTES. 1. Sample Representational Factors Independence Business credibility n Financial acumen n Confidence and teamwork n Active engagement n n Geographic market knowledge n Diversity Key Elements of Board Competency. Board Composition 31 Address representational factors— demographic and geographic diversity, for example—that are important in terms of board composition.
1 1 1 1 1 1 1 1 2 2 2 2 2 2 2 2 3 3 3 3 3 3 3 3 4 4 4 4 4 4 4 4 5 5 5 5 5 5 5 5 ? ? ? ? 24 BUILDING BETTER BOARDS • Corporate governance, which covers activities relating to the board’s own leadership, performance, and composition For each specific area of responsibility in each general group, directors rate the board’s actual and optimal level of engagement on a sliding scale that describes the relative intensity of engagement by the board and senior management, respectively, ranging from no engagement to exclusive engagement.
As a practical matter, many boards end up using both sources. One commission member whose board does just that, explained, “It can be useful to use search firms to surface candidates beyond our immediate network. ’” Role of the CEO Now that nominating/governance committees have taken the lead in director recruitment, many boards are struggling to define the appropriate role for the CEO in the process. As a first step, the CEO should be engaged with the board in defining and mapping board competencies and setting priorities for each search; for example, if the CEO feels strongly that she needs someone on the board with more industry experience and the nominating/governance committee was planning to focus on financial expertise, that’s a serious issue that should be addressed before recruitment begins rather than midway through the process.