2021
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Despite years of research showing the importance of diversity and inclusion in the boardroom, boards are still failing to bring about meaningful change. Let’s look at the S&P 500. In 2020, one-third of their boards had two or fewer female directors, falling below the recommended minimum of three. A paltry 27.6 percent of board seats…
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The Role of the CEO in Mergers and Acquisitions [Harvard Law School Forum on Corporate Governance]
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1 min read
The last 18 months will likely go down as one of the most disruptive – and likely most difficult – periods leaders will face in their careers. Yet despite all the challenges this year, there are signs of an improving economy. Unemployment numbers are decreasing after a substantial increase earlier this year. Many companies are…
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The average director spends 200 hours a year on board activities per company (excluding travel), but not all directors spend those hours the same way. There are a set of directors who serve on the boards of high-performing companies (exceeding total shareholder return compared to relevant benchmarks for two or more years in a row)…
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The last 18 months will likely go down as one of the most disruptive – and likely most difficult – periods leaders will face in their careers. Yet despite all the challenges this year, there are signs of an improving economy. Unemployment numbers are decreasing after a substantial increase earlier this year. Many companies are…
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The Board’s Role in Sustainable Leadership [Harvard Law School Forum on Corporate Governance]
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1 min read
Sustainability—both social and environmental—has quickly risen to the top of corporate agendas in recent years. This is in part because of the growing evidence that sustainable practices result in improved financial performance, and in part due to pressure from investors, employees, and the public for companies to articulate the role they play in addressing societal…
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Few issues have risen to the top of boardroom agendas faster than diversity, equity, and inclusion. The growing awareness of how diversity enables innovation, and how diverse and inclusive organizations drive business performance has become hard to ignore. So too have the events that continue to elicit widespread societal outrage over the mistreatment of people…
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The Board’s Oversight of Racial & Ethnic Diversity, Equity, and Inclusion [The Corporate Governance Advisor]
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1 min read
What motivates board oversight of racial equity: The following risks and opportunities motivated directors’ increased focus on racial and ethnic diversity, equity, & inclusion (DE&I): reputation, strategy, financing, regulatory and compliance, and human capital. Directors did not cite the potential economic impact of racial inequity as a key motivator. Read the full article, co-authored with…
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What Your Board Needs to Know About Nasdaq’s Rule Change on Diversity Disclosure [Russell Reynolds Associates]
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1 min read
On Friday, Nasdaq won Securities and Exchange Commission approval to implement rule changes for listed companies, requiring increased disclosure around board diversity. The likely result of this will be a growing competition for directors who are women, racial and ethnic minorities, or identify as LGBTQ+. While it is possible that the rule implementation will be…
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Sustainability – both social and environmental – has quickly risen to the top of corporate agendas in recent years. This is in part because of the growing evidence that sustainable practices result in improved financial performance, and in part due to pressure from investors, employees, and the public for companies to articulate the role they…
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The emphasis on diversity, equity and inclusion (DEI) in the boardroom is shaping up to be a permanent reframing of all that boards do and, more broadly, how companies approach corporate governance writ large. Though this emphasis has been steadily increasing over the past several years, the events of 2020 have accelerated ongoing discussions and…
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What motivates board oversight of racial equity: The following risks and opportunities motivated directors’ increased focus on racial and ethnic diversity, equity, & inclusion (DE&I): reputation, strategy, financing, regulatory and compliance, and human capital. Directors did not cite the potential economic impact of racial inequity as a key motivator. Oversight in practice: Directors referenced one…
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Sustainability is increasingly becoming part of the corporate lexicon, finding a home in strategic plans, shareholder communications, and investment proposals. It’s not greenwashing, it’s a growing awareness that companies don’t need to sacrifice profits to take action that improves the world – and in fact, doing good helps companies do well. It is no surprise…
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The Board’s Oversight of Racial and Ethnic Diversity, Equity, and Inclusion [Russell Reynolds Associates, et.al.]
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2 min read
In summer 2020, State Street enhanced its commitment to advancing racial justice both inside and outside the organization. As part of this effort, the company launched “10 Actions Against Racism and Inequality” and made these commitments public to increase accountability and motivate peer companies to take action too. Commitment #7 tasked the Asset Stewardship team…
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Over the past five years, the largest institutional investors have been increasingly vocal and specific about their expectations of boards and directors regarding board composition and ESG. Despite this, they have rarely acted on those concerns when it comes to director voting. However, the ExxonMobil proxy fight may be a sign things have changed. Twenty…
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Few boardroom activities are more consequential than CEO succession planning, and many directors would argue that it is the single most important thing they do. Determining who leads the company impacts everything from strategy and operations to culture, talent, and the company’s role in society. Boards are spending more and more time on succession-related activities,…
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2021 Global Leadership Monitor: Leadership Preparedness for the Road Ahead [Russell Reynolds Associates]
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2 min read
The last year has been one of monumental change for business leaders across the world. Defined by a global pandemic, economic concerns, political strife and social unrest, it has presented unique challenges and stretched individual and collective leadership capabilities. It has added energy to discussions about the purpose of business and its responsibility not just…
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The Swiss government’s gender guidelines, which mandate that large companies have a minimum of 30 percent women at the supervisory board level, and 20 percent at the executive level, or explain why not, has so far resulted in little improvement in gender diversity. The twenty companies comprising the Swiss Market Index (SMI) are currently 21…
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Leaders with a ‘Sustainable Mindset’ Can Help Solve Societal Problems [World Economic Forum]
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1 min read
The past year has highlighted what will likely be an ongoing challenge for years to come: the increasing frequency of challenges leaders must face that impact the economy, environment and society simultaneously. From pandemics to large-scale environmental disasters, to uprisings over societal injustice, it is clear that we need problem-solvers who can transcend silos –…