slide 1: Board member
development slide 2: Question 1
What values do
board members have slide 3: 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.mckinsey.com/insights/leading_in_the_21st_century/board_governance_depends_on_where_you_sit slide 4: 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.mckinsey.com/insights/leading_in_the_21st_century/board_governance_depends_on_where_you_sit slide 5: Further inspiration
https://www.teacherspayteachers.com/Product/Questions-to-discover-your-values-1329394 slide 6: Question 2
To what extent do board
members work to fulfill
the company purpose slide 7: 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 slide 8: Further inspiration
https://www.teacherspayteachers.com/Product/Questions-to-discover-your-purpose-1438787 slide 9: Question 3
How different are
board members slide 10: Board diversification is an increasingly
important topic inside boardrooms.
http://www.heidrick.com//media/Publications20and20Reports/Boards-and-the-permanent-revolution-in-governance.pdf slide 11: Aspects of diversity
Skill / knowledge diversity.
http://www.heidrick.com//media/Publications20and20Reports/HS_EuropeanCorpGovRpt2011.pdf slide 12: http://www.mckinsey.com/Insights/Organization/Why_diversity_matters slide 13: 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. slide 14: Research from multiple sources has shown
that competive advantage innovation and
increased shareholder value among other
benefits are linked to a diverse board
http://www.heidrick.com//media/Publications20and20Reports/Boards-and-the-permanent-revolution-in-governance.pdf slide 15: 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/ slide 16: 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/ slide 17: Non-national directors on boards - Europe
http://www.heidrick.com//media/Publications20and20Reports/HS_EuropeanCorpGovRpt2011.pdf slide 18: 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/ slide 19: http://www.heidrick.com//media/Publications20and20Reports/HS_EuropeanCorpGovRpt2011.pdf
women on the
board slide 20: 17 of SP 500 directors are
women up from 12 in 2002.
http://hbr.org/2014/03/the-boardrooms-quiet-revolution/ar/3 slide 21: 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
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. slide 22: Further inspiration
https://www.teacherspayteachers.com/Product/How-diverse-is-the-group-2005865 slide 23: Question 4
How much time do board
members invest in their work slide 24: 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 slide 25: 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. slide 26: Number of days a year
http://www.mckinsey.com/Insights/Strategy/Improving_board_governance_McKinsey_Global_Survey_results slide 27: Board meetings
http://www.heidrick.com//media/Publications20and20Reports/HS_EuropeanCorpGovRpt2011.pdf slide 28: 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 slide 29: We need not another layer of legal procedures
but a new culture of governance one in which
professional directors view their role as their
http://hbr.org/2010/12/the-big-idea-the-case-for-professional-boards/ar/6 slide 30: If a potential director can’t put in 300 to
350 hours a year she shouldn’t take
David Beatty slide 31: 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 slide 32: 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 slide 33: How can companies achieve the right degree of
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 slide 34: Board members
http://www.pwc.com/us/en/corporate-governance/annual-corporate-directors-survey/assets/pdf/pwc-annual-corporate-directors-survey-full-report.pdf slide 35: Question 5
What tasks do board members
invest their time on slide 36: Traditional board agenda slide 37: http://www.mckinsey.com/Insights/Strategy/Building_a_forward-looking_board slide 38: 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 slide 39: Additional forward looking
board activities slide 40: http://www.mckinsey.com/Insights/Strategy/Building_a_forward-looking_board slide 41: 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 slide 42: 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 slide 43: Ensuring that a company has a great strategy
is among a board’s most important functions.
http://www.mckinsey.com/insights/strategy/tapping_the_strategic_potential_of_boards slide 44: Engaging in strategy and resource allocation
is really where boards can help the most to
http://www.mckinsey.com/insights/strategy/rethinking_where_to_compete_an_interview_with_the_ceo_of_pentair slide 45: To better prepare for succession boards
should have multiple discussions each year
to identify the company’s next generation
http://www.billgeorge.org/page/board-governance-depends-on-where-you-sit slide 46: Question 6
How do board members
competence slide 47: Missing skill among
many board members:
https://hbr.org/2013/07/joining-a-board-who-you-know-m slide 48: 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 slide 49: 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 slide 50: 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 slide 51: 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. slide 52: 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 slide 53: Question 7
How can board members
evaluate IT performance slide 54: Question 1: How well does technology enable
the 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 slide 55: 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 slide 56: 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 slide 57: 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 slide 58: Question 5: How strong is our supply of next-generation
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.