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All parties, but especially CEOs, should acknowledge different points of view and work to minimize the conflicts that inevitably arise from them.
This requires high-level listening skills, the ability to see situations from the other person’s perspective, and the wisdom to understand the basis for the different points of view.
http://www.billgeorge.org/page/board-governance-depends-on-where-you-sithttp://www.mckinsey.com/insights/leading_in_the_21st_century/board_governance_depends_on_where_you_sit
Board members need to understand and trust each other. Only when they can have candid conversations will they ultimately reach a consensus that has positive and far-reaching implications for the company.
Trust becomes even more important when meetings are conducted by telephone, which is often the case in crises.
http://www.billgeorge.org/page/board-governance-depends-on-where-you-sithttp://www.mckinsey.com/insights/leading_in_the_21st_century/board_governance_depends_on_where_you_sit
Further inspiration
https://www.teacherspayteachers.com/Product/Questions-to-discover-your-values-1329394
The board of CVS decided to stop selling cigarettes -a USD 2 billion annual business.
Larry Merlo, chairman of the board at CVS:“It is the right thing for us to do for our customers and our company to help people on their path to better health. Put simply, the sale of tobacco products is inconsistent with our purpose.”
http://www.strategy-business.com/article/The-Mindful-Board
Further inspiration
https://www.teacherspayteachers.com/Product/Questions-to-discover-your-purpose-1438787
Board diversification is an increasingly
important topic inside boardrooms.
http://www.heidrick.com/~/media/Publications%20and%20Reports/Boards-and-the-permanent-revolution-in-governance.pdf
Aspects of diversity Skill / knowledge diversity. Gender diversity. Nationality diversity. Experience diversity. Age diversity.
http://www.heidrick.com/~/media/Publications%20and%20Reports/HS_EuropeanCorpGovRpt2011.pdf
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http://www.strategy-business.com/blog/The-Advantages-of-a-Diverse-Board
Survey shows that boards with a higher level of racial diversity pursued more breakthrough
product improvements.
Research from multiple sources has shown that competive advantage, innovation, and increased shareholder value, among other
benefits, are linked to a diverse board of directors.
http://www.heidrick.com/~/media/Publications%20and%20Reports/Boards-and-the-permanent-revolution-in-governance.pdf
Being around people who are different from
us makes us more creative, more diligent and harder-working.
http://www.scientificamerican.com/article/how-diversity-makes-us-smarter/
Boards that look more like their target market have a better understanding of their target market.
https://hbr.org/2012/04/geting-the-most-out-of-your-bo/
Non-national directors on boards - Europe
http://www.heidrick.com/~/media/Publications%20and%20Reports/HS_EuropeanCorpGovRpt2011.pdf
Companies targeting significant growth in
emerging markets benefit from having board members from those countries.
https://hbr.org/2011/11/board-diversity-and-global-age/
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Proportion of women on the board
17% of S&P 500 directors are women, up from 12% in 2002.
http://hbr.org/2014/03/the-boardrooms-quiet-revolution/ar/3
http://www.economist.com/blogs/economist-explains/2014/03/economist-explains-14
Over time, advocates of quotas hope that a sudden large increase in the number of women in leadership will change attitudes.
They point to the results of a law passed in 1993 in India that reserved positions for women in randomly selected village councils. A decade later women were more likely to stand for, and win, elected positions in those villages that had by chance reserved positions for women in the previous two elections.
Further inspiration
https://www.teacherspayteachers.com/Product/Gender-diversity-1416477https://www.teacherspayteachers.com/Product/How-diverse-is-the-group-2005865
Board members are increasingly devoting 2-3 days per month of work, plus extra hours for conference calls, retreats, and other check-ins.
http://www.mckinsey.com/business-functions/business-technology/our-insights/adapting-your-board-to-the-digital-age
http://www.mckinsey.com/Insights/Strategy/Improving_board_governance_McKinsey_Global_Survey_results
Time that board members invest per year working on company matters
Region Days invested
Board members of North American companies. 22 days.
Board members of European companies. 29 days.
Board members of Asian companies. 34 days.
Number of days a year board spends
http://www.mckinsey.com/insights/strategy/High-performing_boards_whats_on_their_agendahttp://www.mckinsey.com/Insights/Strategy/Improving_board_governance_McKinsey_Global_Survey_results
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Private equity directors spend, on average, 54 days on their roles. Directors at public companies spend on average 19 days on their roles. Even in the bigger FTSE 100 companies, the average commitment is only 25 days a year.
In both models of ownership, directors spend 15-20 days a year on formal meetings. Private equity non-executives devote an additional 35-40 days to hands-on, informal interactions, for example field visits, ad hoc meetings with executives, phone calls, internet communication, while nonexecutive directors at public companies only spend 3-5 days a year on hands-on, informal interactions.
http://www.mckinseyquarterly.com/Corporate_Finance/Capital_Management/The_voice_of_experience_Public_versus_private_equity_2245
We need not another layer of legal procedures but a new culture of governance, one in which professional directors view their role as their
primary occupation.
http://hbr.org/2010/12/the-big-idea-the-case-for-professional-boards/ar/6
If a potential director can’t put in 300 to 350 hours a year, she shouldn’t take
the job.
http://www.mckinsey.com/insights/corporate_finance/Are_you_getting_all_you_can_from_your_board_of_directors
David Beatty
Only 43% of the nonexecutive directors of public companies believe they significantly influence strategy. For this to change, board members must devote much more time to their roles.
4-5 days a month obviously give a board member
much greater understanding and impact than the 3 days a quarter (of which two may be spent in transit) devoted by the typical board member of a public company.
http://hbr.org/2011/03/capitalism-for-the-long-term/ar/4
http://www.mckinsey.com/insights/leading_in_the_21st_century/governance_since_the_economic_crisis_mckinsey_global_survey_results
Most effective factors for improving overall board performance
How can companies achieve the right degree of commitment?
What does actually help is a board environment that encourages participation and allows board
members to derive meaning, inspiration, and
satisfaction from their work.
http://www.mckinsey.com/Insights/Strategy/Building_a_forward-looking_board
Board members educate themselves more
http://www.pwc.com/us/en/corporate-governance/annual-corporate-directors-survey/assets/pdf/pwc-annual-corporate-directors-survey-full-report.pdf
http://www.mckinsey.com/Insights/Strategy/Building_a_forward-looking_board
http://www.mckinsey.com/insights/strategy/tapping_the_strategic_potential_of_boards
Board members understand the respective company’s financial position better than its strategy
http://www.mckinsey.com/Insights/Strategy/Building_a_forward-looking_board
http://www.pwc.com/us/en/corporate-governance/annual-corporate-directors-survey/assets/pdf/pwc-annual-corporate-directors-survey-full-report.pdf
Many board members want to invest much more time on strategy
http://www.mckinsey.com/insights/leading_in_the_21st_century/governance_since_the_economic_crisis_mckinsey_global_survey_results
Percent of time that board currently spends on issue
Ensuring that a company has a great strategyis among a board’s most important functions.
http://www.mckinsey.com/insights/strategy/tapping_the_strategic_potential_of_boards
Engaging in strategy and resource allocationis really where boards can help the most to create value.
http://www.mckinsey.com/insights/strategy/rethinking_where_to_compete_an_interview_with_the_ceo_of_pentair
To better prepare for succession, boards should have multiple discussions each year to identify the company’s next generation of leaders.
http://www.billgeorge.org/page/board-governance-depends-on-where-you-sit
Missing skill among many board members:Knowledge about technology.
https://hbr.org/2013/07/joining-a-board-who-you-know-m
5% of board members in non-technology companies have digital competencies.
Denmark and Spain rank lowest (2%).Sweden ranks highest (8%).
http://www.amrop.com/digitization-boards-amrops-2016-report
Digital is so far-reaching - think e-commerce, mobile, security, the Internet of Things (IoT), and big data -that the knowledge and experience needed goes beyond one or two tech-savvy people on the board.
http://www.mckinsey.com/business-functions/business-technology/our-insights/adapting-your-board-to-the-digital-age
At the board level, there is a need for knowledgeable, independent directors with experience and perspective in putting technology to use.
http://www.strategy-business.com/article/Your-Next-Board-Member-Should-Be-a-Geek
https://hbr.org/2015/09/all-boards-need-a-technology-expert
Consider involving a technology entrepreneur to your board who can help educate other board members.
Open and transparent interactions with the CIO can help the board stay current on the fast-changing nature of technology and its impact on the company.
http://www.strategy-business.com/blog/Bringing-Tech-Insight-to-Corporate-Boards
Question # 1: How well does technology enablethe core business?
Examples of numbers used to measure: Percentage of business processes that have been automated. Minutes used to do business process x.
http://www.mckinsey.com/business-functions/business-technology/our-insights/five-questions-boards-should-ask-about-it-in-a-digital-world
Question # 2: What value is the business getting from its most important IT projects?
Examples of numbers used to measure: Costs of project x. Plan / schedule for project x.
http://www.mckinsey.com/business-functions/business-technology/our-insights/five-questions-boards-should-ask-about-it-in-a-digital-world
Question # 3: How long does it take IT teams to develop and deploy new features and functionality?
Example of number used to measure:Percentage of IT teams that can develop and deploy new relevant functionalities in 4 to 8 weeks in a secure, repeatable way.
http://www.mckinsey.com/business-functions/business-technology/our-insights/five-questions-boards-should-ask-about-it-in-a-digital-world
Question # 4: How efficient is IT at rolling out technologies and achieving desired outcomes?
Example of number used to measure:Number of incidents reported per software app.
http://www.mckinsey.com/business-functions/business-technology/our-insights/five-questions-boards-should-ask-about-it-in-a-digital-world
Question # 5: How strong is our supply of next-generation IT talent?
Example of number used to measure:Percentage of project roles that could not be adequately staffed over a 12-month period because of a lack of internal skills.
http://www.mckinsey.com/business-functions/business-technology/our-insights/five-questions-boards-should-ask-about-it-in-a-digital-world