Corporate Board Composition Strategies
The composition of a company’s board of directors is a key determinant to the health of the organization. Boards are comprised of individuals with expertise relative to the profitability and growth of the company. The skills on the board need to reflect the changing business climate and issues facing the company. The board of a fast growing start-up may need to understand the culture of a fast paced company while helping management to take steps to transition to a mature market. By contrast, boards at companies in mature markets may require more experience in pension issues or succeeding in global markets to expand their reach.
A successful board includes a diversity of skills and experiences. This brings different perspectives to issues and broadens problem-solving skills. Diverse boards can also serve as a motiving factor for different subsets of employees who see the board members as role-models.
Boards require a rigorous methodology to assess their skills and plan for changes whether resulting from board retirements or an evolving business climate. One of the best practice standards for good governance includes a process to change members of the board when the need arises.