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How to Select a Board Member

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					        a best-in-class board is a bulwark against questionable
        practices and a necessity for any corporation that aims to
        increase accountability and enhance shareholder value




heidrick & struggles   Building high-performance boards
how to select a
board member
changing times require nominating committees and ceos to ask hard,
fundamental questions about their own boards: is every director qualified
to perform the critical oversight function? does each director truly
understand the business today?


The governance and accounting scandals that            meeting the strategic needs
have scarred the business landscape in recent          of the company
years have had at least one positive effect: They
have given executives, investors and the public a      in the past, directors were viewed primarily
renewed appreciation for the vital role of corporate   as advisors to the chief executive officer. They
boards. A best-in-class board is a bulwark against     frequently had business or personal ties to the
questionable practices and a necessity for any         ceo or other members of the board, and they
corporation that aims to increase accountability       were often chosen to add the luster of a well-
and enhance shareholder value.                         known name. but a high public profile and a
                                                       golf-course friendship with the ceo are no longer
recognition of the critical importance of boards
                                                       sufficient qualifications. As The conference board’s
is implicit in the sarbanes-oxley Act of 2002, as
                                                       global corporate governance research center
well as in the rules issued by the u.s. securities
                                                       emphasizes in a special report on best practices,
and exchange commission in response to the Act.
                                                       directors’ new role “requires [that] they provide
Together, sarbanes-oxley and the sec decrees
                                                       active oversight of the company’s business to
have served to radically reshape board structure,
                                                       minimize corporate risk and promote the
processes and accountability. in effect, they’ve
                                                       creation of shareholder value. The new challenge
mandated new responsibilities and requirements
                                                       for boards will be to go beyond their traditional
that demand an increased level of participation
                                                       advisory role and increasingly focus on their
and independence from the board. This has
                                                       oversight role. As fiduciaries, boards must be
motivated corporations to make a stronger effort
                                                       active monitors of management.” Today,
to build better boards – boards that are active,
                                                       directors must add real value to the corporation
integrated, informed and independent. such a
                                                       and to its shareholders.
move is an ethical, legal business necessity, but it
is far from easy.



                                                                                                              
changing times require nominating committees                is to understand how the board works – and how
and ceos to ask hard, fundamental questions                 it might work better.” in this context, nominating
about their own boards: is every director qualified         committees will be able to thoughtfully select
to perform the critical oversight function? does            new directors at the appropriate time.
each director truly understand the business today?
do the skills and experiences of our directors
                                                            it’s about passion,
meet the specific strategic needs of the company?
strategic, financial and operating acumen are
                                                            commitment and time
necessities in each board member. collectively,
                                                            Assessing a potential nominee’s stature, skill set,
the board should possess a blend of skills tailored
                                                            depth of experience, wisdom, reputation, values
to the company’s current business needs and
                                                            and passion is only half the battle. The other half
future goals. And no matter what the director’s
                                                            is time. perfect attendance at full board meetings
background, a proven reputation and a track
                                                            is a formidable commitment, even before allowing
record of excellence in his or her field are essential.
                                                            time for preparation, committee meetings, facility
board nominating committees must evaluate                   visits, training sessions, and travel to and from
director candidates not only on the basis of                those activities. The time demands inevitably
their experience, but also their personal                   reduce the pool of willing and able candidates.
character. According to Joie gregor, a vice
                                                            The increasing obligations of board service make
chairman and member of the board practice at
                                                            it tougher than ever to recruit qualified directors.
heidrick & struggles, “ideal board members are
                                                            in addition, in the face of fierce public scrutiny
pragmatic, strategic and tough-minded. They
                                                            and questions of potential liability, willing and
are willing and able to offer critical review, and
                                                            qualified director candidates are growing ever
are adept at giving direct guidance and feedback.
                                                            more selective about the opportunities that
strong directors speak their minds, but they also
                                                            they will entertain.
have a real sense of partnership and of working
together toward a common goal.” gregor also                 Although sitting ceos have been the most
emphasizes that “with each potential nominee,               sought after board candidates traditionally, looking
the nominating committee should ask itself                  beyond sitting ceos is an excellent way to expand
whether this candidate is deeply interested in              the pool of potential candidates. presidents, chief
making a meaningful contribution to the company.            operating officers, chief financial officers, and
                                                            heads of large operating units can bring skills,
“every board today should undertake a
                                                            passion and fresh perspective to the boardroom.
thorough and objective assessment to determine
                                                            Attracting great directors of this caliber is easier
the competencies and behaviors of each board
                                                            once they understand how much they stand to gain
member and of the group as a whole,” counsels
                                                            from serving on an outside board – the learning
gregor. “The goal is to identify areas where the
                                                            experience and the exposure will be invaluable
board can improve to bring its performance up to
                                                            in their own career development. of course,
a best-in-class level. it is a fairly rigorous exercise,
                                                            mentoring and director education are essential for
but the best way to determine board effectiveness
                                                            first-time directors.




heidrick & struggles     Building high-performance boards
executive search firms                                  the market to identify potential candidates, and we
and best practices                                      assess each candidate’s skills, personal attributes,
                                                        and specific fit for the board. our track record of
building excellent boards is hard at any time, but      recruiting at the top gives us unique insight into
especially so in today’s business environment.          the next generation of board members.
evaluating and recruiting qualified and interested
                                                        in addition to greatly expanding the pool of
directors, already a full-time job, has only grown
                                                        qualified and interested candidates for every
more challenging with the adoption of sec rules
                                                        board seat, heidrick & struggles professionalizes
that require the nominating committee of every
                                                        the nominating process by offering an objective
board to disclose its process for identifying and
                                                        analysis of a candidate’s qualifications to serve.
evaluating nominees. in light of this mandate,
                                                        our time proven process helps to affirm director
many companies will opt to retain an executive
                                                        independence by thoroughly screening candidates
search firm to ensure the assessment and selection
                                                        against areas of potential conflict.
process is rigorous and to gain access to a wider
pool of candidates.                                     The director’s role is key to every company’s long-
                                                        term value creation. heidrick & struggles ensures
enlisting the expertise of a qualified search firm is
                                                        that you will find the best possible person for this
increasingly regarded as a best practice in director
                                                        critical job.
selection. heidrick & struggles thoroughly scans




                                    looking beyond sitting ceos
                                    is an excellent way to expand the
                                    pool of potential candidates

				
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Description: How to Select a Board Member