The Importance of Board Composition- Susan Champan-Hughes
Executive boards have started their long-overdue focus on diversity efforts. An unfamiliar territory to many, boards are struggling with onboarding strategies but doing their best to make the appropriate changes. I spoke with the JPM podcast ‘What’s the Deal’ on the changes in the interview and evaluation processes for boards that have come with the organization’s diversity efforts.
“Boards today have to be very thoughtful, particularly non-gov committees, about the board composition matrix. When you’re looking at that matrix, asking ‘well what do we really need?’ You need to have an honest assessment of who needs to be in the room.
“Here’s an example, I was talking with a friend of mine the other day and he was struggling with trying to fit a specific ‘window dressing’ candidate. I told him to think about what he really needed and we talked about the business challenges that they were having. It turns out that what he really needed was someone who has a really strong sourcing background, who’s brought digital transformation to functions etc. I told him that there are probably 5 people who can be on that list now, so going forward I would advise your team to go through and talk through what the real business need is. That means that you have to really double down and understand the strategy of the business so that you know whom you need to bring into the boardroom.
“There are some real challenges out there whether it’s cyber security or supply chains, which is a huge issue for a lot of companies right now. Many companies are sitting there rudderless because they don’t have anyone in the boardroom to come to help them think about what solutions they can bring to the challenges that they have.
“It’s nice when you have a good mix of people, but it also means that you have to think differently on how you manage your board. If you want someone who is still working in an operating role, you can’t have 4-day board meetings. People need to be better at reaching out and asking for help, sometimes boards don’t do that. But through the board composition and evaluations processes, they can really make some big changes.”
