Every company should be headed by an effective board which is collectively responsible for the long-term success of the company. With higher expectations from customers and investors, the responsibilities of boards and who sits on them is changing.
As an advisor to many boards, I have enjoyed being part of the change by using my perspective and professional expertise to support businesses.
So, why are boards changing?
The responsibilities of a board have expanded from business strategy to encompass aspects such as regulations, ESG, investor relationships and customer experience. Dealing with a wider array of matters requires different professional experiences.
Boards could do with an injection of different executive roles in order to better understand the new responsibilities. 68% of board members that aren’t CEOs, CFOs or Company Secretaries are COOs, CMOs and CTOs, demonstrating the emphasis on operational, marketing and technical expertise within boards.
Board members holding positions of CMO make up a small portion of board members surveyed, despite their expertise in customer experience and commercial delivery. Diversifying the professional expertise of a board will support the many roles of the board and ensure stakeholders are happy with the business direction.
In a report by Women on Boards and Protiviti, 82% of board members felt employees expected the board to discuss People and Culture, and 51% thought pressure was coming from regulators and investors. Board members commented that there was plenty of discussion on People and Culture, but actions and accurate tracking was limited.
The FTSE 100’s milestone that all company boards have one third women was met in 2020, but other company boards are still lagging behind.
10% of executive board directors are women, a statistic that increases to 24% when excluding the top three roles of CEO, CFO and Company Secretary. All companies, no matter their size, would benefit from increased diversity on the board and in positions of leadership to match the diversity of staff and customers.
Boards have been gradually diversifying their members over the last ten years, but more needs to be done to ensure boards have the right experience to deliver on promises to stakeholders.
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