Boards of Directors
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Board chairs and nom/gov committee chairs often ask the question, “When and how should the CEO be involved in board recruiting?” The question is even more important when a new CEO is in the role and there is a need to define working relationships and practices. Over the past couple of decades, there have been…
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Faced with a CEO succession, many corporate directors hope an internal change agent will emerge as a viable candidate for the role. What specifically are boards looking for in these internal candidates? Our experience with CEO succession over the last several years tells us that four priorities increasingly rise to the top: The ability to…
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Inclusive Culture and DE&I: Gold Medal Boards Take the Lead [The Harvard Law School Forum on Corporate Governance]
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2 min read
Around the globe, diversity, equity, and inclusion (DE&I) has grown to become a critically important boardroom topic given the increasing focus by legislatures, regulatory bodies, stock exchanges, investors, and the general public. Many of these stakeholders have enhanced their expectations around DE&I because of the growing body of research that shows improving DE&I results in…
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Genuine Commitment and Explicit Net Zero Targets [Harvard Law School Forum on Corporate Governance]
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1 min read
As pressure mounts from stakeholders, sustainability has never been a bigger focus for boards. Investors, lawmakers, regulators, employees, and customers are all focused on sustainability, and often wonder if the board is doing enough to set up the company for long-term success in an increasingly sustainability-minded environment. Around the world—from regulators in Europe to the…
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How Gold Medal Boards Prioritize Their Time [Harvard Law School Forum on Corporate Governance]
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2 min read
Consciously or unconsciously, every board independently decides where it is going to focus its attention and efforts. We asked directors to reflect on their board agenda over the past 12 months and identify the top three areas where their full board has spent the most time, and we then ranked those items based on how…
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The Critical Role of the Board Chair in Driving Board Performance [Harvard Law School Forum on Corporate Governance]
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2 min read
While all directors can contribute to the board’s success, the board chair has a unique set of responsibilities, both in the tone that they set, and their influence on how time and resources are deployed. The best board chairs are facilitators who get the best out of the collective expertise of the board—yet many chairs…
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The High Impact Behaviors of the Most Effective Directors [Harvard Law School Forum on Corporate Governance]
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1 min read
As Peter Drucker said, “culture eats strategy for lunch.” This is true in the best boardrooms as well. Three years ago, we identified a group we call Gold Medal Boards; those where directors rate their board’s effectiveness highly (9 or 10 on a 1–10-point scale) and where the company has outperformed relevant TSR benchmarks for…
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No corporate director dreams of sitting on an ineffective board—yet many will find themselves serving on a board that underperforms relative to their expectations. As part of our 2022 Global Director Behaviors and Board Culture study, over 1,100 directors shared insights about the people they serve with, how they focus their time and attention, and…
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Focusing on the Future: How Gold Medal Boards Prioritize Their Time [Russell Reynolds Associates]
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2 min read
Consciously or unconsciously, every board independently decides where it is going to focus its attention and efforts. We asked directors to reflect on their board agenda over the past 12 months and identify the top three areas where their full board has spent the most time, and we then ranked those items based on how…
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While all directors can contribute to the board’s success, the board chair has a unique set of responsibilities, both in the tone that they set, and their influence on how time and resources are deployed. The best board chairs are facilitators who get the best out of the collective expertise of the board – yet…
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Director Performance: The High Impact Behaviors of the Most Effective Directors [Russell Reynolds Associates]
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1 min read
As Peter Drucker said, “culture eats strategy for lunch.” This is true in the best boardrooms as well. Three years ago, we identified a group we call Gold Medal Boards; those where directors rate their board’s effectiveness highly (9 or 10 on a 1–10-point scale) and where the company has outperformed relevant TSR benchmarks for…
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Sustainability: Genuine Commitment and Explicit Net Zero Targets [Russell Reynolds Associates]
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1 min read
As pressure mounts from stakeholders, sustainability has never been a bigger focus for boards. Investors, lawmakers, regulators, employees, and customers are all focused on sustainability, and often wondering if the board is doing enough to set up the company for long-term success in an increasingly sustainability-minded environment. Around the world – from regulators in Europe…
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Inclusive Culture and DE&I: Gold Medal Boards Take the Lead [Russell Reynolds Associates]
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2 min read
Around the globe, diversity, equity, and inclusion (DE&I) has grown to become a critically important boardroom topic given the increasing focus by legislatures, regulatory bodies, stock exchanges, investors, and the general public. Many of these stakeholders have enhanced their expectations around DE&I because of the growing body of research that shows improving DE&I results in…
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When 9 is the Perfect Number: the 7+2 Model for Highly Effective Boards [Russell Reynolds Associates]
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1 min read
No corporate director dreams of sitting on an ineffective board – yet many will find themselves serving on a board that underperforms relative to their expectations. As part of our 2022 Global Board Culture and Director Behaviors study, over 1,100 directors shared insights about the people they serve with, how they focus their time and…
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The Boardroom Boost [Russell Reynolds Associates]
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1 min read
While the events of the last two years brought some companies to their breaking points, it seems to have had the opposite effect on many corporate boards. Working with our colleagues at Russell Reynolds Associates, we recently completed our third global Board Culture and Director Behaviors study, which includes a comprehensive survey completed by over…
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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 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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The COVID-19 crisis has increased the demand for board insight, oversight, and advice, while boards attempt to adapt to new ways of working, new tools, and new structures. Many have stepped up as a powerful sounding board for stressed CEOs. Other boards struggle, not contributing as needed or causing unnecessary distractions. Despite the fact that…
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In February 1992, General Motors announced that it had lost $4.5 billion the prior year, then the worst ever annual loss for an American corporation. In the short-term, things didn’t get better. Losses the following year totaled $23.5 billion. In the middle of this bleak period, GM’s board took decisive steps. The company’s chairman and…
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Board Leadership and Performance in a Crisis [Harvard Law School Forum on Corporate Governance]
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2 min read
Every industry across the globe has faced a crisis at some point in time. While most large companies survive, many struggle for years following a period of severe adversity. Others prevail and become stronger than before. How companies address crises has changed over time, as has the role of the board. Amid COVID-19’s rapid spread…
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In 2020, the world entered an unprecedented economic era, triggered by a global pandemic and the contemporaneous collapse in commodity prices, demand for certain goods and services, and a breakdown in supply chains. This was further fueled by constraints on productivity and consumerism due to a need to practice social distancing and to shelter in…
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Every industry across the globe has faced a crisis at some point in time. While most large companies survive, many struggle for years following a period of severe adversity. Others prevail and become stronger than before. How companies address crises has changed over time, as has the role of the board. Amid COVID-19’s rapid spread…
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Driving Leadership Performance and Development in a Crisis: Ten Enduring Lessons [Russell Reynolds Associates]
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1 min read
The current COVID-19 pandemic is a global tragedy with profoundly human consequences. It is also creating situations where we have seen examples of extraordinary human performance and growth, as individuals and leaders come together to do what they can to help those around them. As senior executives naturally focus on the immediate implications of this…
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Many observers have been vocal in their perception of a decline in director quality in recent years. According to the 2019 PwC Corporate Directors Survey, 49 percent of US directors say one or more fellow board members should be replaced, and 23 percent say two or more should go. These numbers are up from both…
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Building Better Boards: Taking the Long-View of Director Succession [Russell Reynolds Associates]
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1 min read
When it comes time to fill an open spot on the board of directors, it’s far too easy—and far too common—for directors to fall into the trap of short-term planning and “who do we know” candidate identification. In recent years, companies have improved with regard to thoughtfully identifying and recruiting senior leaders who are best…
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What the Board Wants to Know: Answers to 12 Common Questions [Russell Reynolds Associates]
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2 min read
The Expectations of Public Company Directors Continue to Rise and the Work is Increasingly Challenging As the business world becomes more complex, organizations are becoming harder to lead and manage, with scrutiny from investors, regulators, shareholders, activists and the media on the rise. There are growing expectations that directors will more closely oversee areas that…
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Going for Gold: The 2019 Global Board Culture and Director Behaviors Survey [Russell Reynolds Associates]
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2 min read
Based on our experience working with hundreds of boards each year, we know board and director performance depends on the quality of board leadership, the ability of the board to focus on the right issues and a small number of critical director behaviors. Our latest research backs this up. The link between critical director behaviors…
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Insight on Demand: The Opportunities and Challenges of Advisory Boards [Russell Reynolds Associates]
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2 min read
At some point, nearly every corporate board will face the same existential crisis: Should the board only include executives with high-level general management and strategy experience – or should it be filled with individuals who have deep expertise in key priority areas? This debate has been bubbling for more than a decade. What began with…
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Institutional investors (both active managers and index fund giants) spent the last few years raising their expectations of public company boards—a trend we expect to see continue in 2019. The demand for board quality, effectiveness, and accountability to shareholders will continue to accelerate across all global markets. Toward the end of each year, Russell Reynolds…
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CEO Transitions: Mitigating Risks and Accelerating Value Creation [Russell Reynolds Associates]
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2 min read
CEO transitions have always been challenging, but never more so than in today’s environment. As a board governance, leadership consulting and search firm, Russell Reynolds Associates is asked regularly to conduct CEO searches and support long-term CEO succession planning. We advise our clients not to forget about transition planning as a distinct process that needs…
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In Search of Greatness: How to Choose an Independent Board Leader [Russell Reynolds Associates]
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1 min read
What makes a great board leader – and how do you know? When US boards look for a new non-executive leader – or a director candidate who could fill that role when the time comes – they often try to identify ideal candidates by looking at backgrounds and experiences. It is a worthwhile endeavor, as…
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GE signed two deals late last year to sell jet engines to China’s Juneyao Airlines and Industrial and Commercial Bank of China (ICBC). The sales are worth a combined $2.5 billion, and in announcing them, GE highlighted that “China will displace the United States as the world’s largest aviation market in 2022, two years faster…
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Artificial Intelligence: A Primer for Corporate Directors [Russell Reynolds Associates]
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1 min read
The term “artificial intelligence” has become part of common parlance – used casually in business publications and corner offices – but it often lacks definition. What does it really mean? Contrary to popular belief, it’s not synonymous with a takeover by an army of robots, nor does it equate to an endless dialogue with Siri…
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Directors & Boards was founded at a time when corporate governance was entering a period of significant transformation, publishing its first issue barely two years after the Model Business Corporations Act fundamentally redefined the role of the board. No longer was it true that “the business and affairs of a corporation shall be managed by…
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Dans le monde entier, de nombreuses sociétés subissent le contrecoup de la conjoncture économique actuelle et des conditions difficiles qui prévalent sur le marché du crédit, sans avoir su prédire les incidences s’y rattachant, incidences auxquelles elles étaient d’ailleurs fort mal préparées. «Bien des fausses rumeurs prétendent que les sociétés canadiennes ne sont pas touchées»,…