EDITORIAL: THE BOARD OF THE FUTURE
November 2023 Edition - Written by Lesley Stephenson
Today, being a board director requires more time and effort than it used to. The responsibilities, liabilities and overall time commitment will remain at this heightened level - or increase - in the future.
To understand the environment and landscape board directors are operating in today and in the future, Egon Zehnder conducted a global study which sheds light on the motivation, dedication, and compensation of board directors across a range of public companies through a series of interviews and a survey that uncovers trends to watch.
The study suggests the composition of boards is changing due to the increasing complexity of board work. To meet the new challenges that accompany these changes, boards must be constituted accordingly.
Whilst the study indicates an average board size of 12 across all markets, the interviews with board practitioners suggest a much smaller board size of 8 to 9 members is preferable.
Where possible, boards should review the number of directors they currently have and prepare for a smaller board designed to enable effective collaboration, content-driven discussions, appropriate focus and results orientation. This arrangement should emphasise the quality of contributions.
Committee work can be strengthened by increasing the number of committees to emphasise specialism and pulling in topic experts as advisors as needed. This should ensure proper delegation of relevant topics and appropriate coverage.
The study suggests an increase in compensation may be vital to attracting global talent, diverse leaders and experts who are scarce and in high demand. Having board directors who possess transformational leadership experience and can contribute to holistic strategic discussions is essential to enhancing future board performance.
You can read the full report of the study here.