Our WOB
colleagues in the UK report that the boards of the FTSE 250 (companies ranked 101 – 350 on the London Stock Exchange) hit 27.5% female representation in late 2018 while the FTSE 100 is at 32%. This compares more than favourably with companies listed on the Australian Stock Exchange where the boards of ASX101 – 350 companies would struggle to make 25%, despite the ASX200 (1-201) recently hitting 30%.
So there is clearly still work to be done on the matter of balance of the sexes – particularly in the echelons of the sub ASX200.For some years now (almost since the GFC really), help has been at hand with the growing awareness that a far broader diversity of skills and experience are required at board level if companies are to survive in the post 2020 world. Two recent articles from Hunt Scanlon Media discuss this in some detail and, while slightly US centric, are well worth a read.
Why Your Board Needs a CHRO
This report (published in April 2019) was authored by two veteran search consultants who argue that the need for a Chief Human Resources Officer has never been greater:
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A culture that yields desired results starts at the top – with the board and the CEO – with a focus on promoting a workforce philosophy and practices that appropriately reward and motivate employees and reassure shareholders….The right culture for a particular company undergirds strong performance while the wrong culture can derail it. Boards should increasingly be seeking the guidance of CHROs, not merely as advisers on these matters, but as full-fledged team members on the board. Ensuring boards have an ongoing connection to cultural issues should now be considered essential to the board’s role in overseeing and managing risk.”
Anecdotally this has also been the case in Australia with search consultants reporting that there is a strong demand for board members with high level strategic HR and also marketing skills. This is a trend across all sectors - not just the ASX. Makes sense really - when you consider that people (staff, clients and customers) are among your biggest costs and your greatest risks.
How to Prepare for Next Generation Talent
The second article (published in April 2019) looked at how well boards are onboarding for generational or age diversity, which is gaining increasing merit in today’s boardrooms as the skill- sets boards need are increasingly found among younger generations. It was based on a report, Next Gen Board Leaders, by Spencer Stuart, which found that boards are tapping into new talent pools for a range of expertise — from cybersecurity and digital marketing to e-commerce and business-model transformation. Yet their onboarding processes are not really keeping up with the pace of change.
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Often referred to as “next generation” directors (i.e., next-gen directors), this new cohort of first-time directors is also more likely to be younger and working active day jobs with backgrounds in technology related fields. As these traits become more common, we’re starting to see an evolving director profile— one that has a new set of challenges, needs and expectations...There was a time when new board members were expected to be quiet the first year, and that’s no longer the case - boards expect people to contribute right away, and new directors want to contribute. But there’s a lot they need to learn before they can really be effective. We’re seeing next-gen directors request more onboarding and a very different kind of onboarding than they have in the past."
As the graphic above shows, the trends towards men and women who are younger, bring diverse skill sets and are full time profressionals is increasing. So while opportunity knocks for women - who often bring diverse skill sets - adjustments will be needed at board level to manage this new age of directors.
Read the Article