Understanding Corporate Boards

Melissa Henderson April 11, 2018

Whether publicly traded, privately held or private equity owned, Summit Executive Resources has been constantly tapped for clarity, insight and counsel regarding the enormously evolving corporate board environment. In response to these numerous requests, Summit has developed a new, four-chapter guide related to understanding corporate boards – “An Essential Guide to Today’s Corporate Boards”. With new regulations, cyber risks and threats, digital innovation and evolving economic conditions, companies and their board of directors are grappling with how to address and get ahead of these issues. In addition, shareholders, investors and more so, activist investors, have increased their expectations and often in a very aggressive manner.

This guide will help to ensure you are positioned for success in the boardroom by examining how to assess and improve board diversity, composition, governance, culture, practices and cyber risk strategies. These insights will provide the tools you need to help you achieve your boardroom goals. On the other side of the equation, for those seeking board of director positions, this guide will help you in conducting your own due diligence for the “right” board. It will also provide insights into the timing associated as to when board candidates are typically evaluated and selected, as well as unconventional tips to landing that coveted seat at the boardroom table.

The Board’s Role

A corporate board of directors is entrusted with helping the company safely navigate through times of tumultuous change and risk, as well as tremendous opportunity and growth. With greater shareholder and investor activism, today’s boards must be have the experience and skillsets to address an ever increasing demand for performance. The board needs to provide strong oversight of the company’s strategy, build a strong defense against just about any kind of risk and ensure strong governance.

A board that does not keep a keen eye of regulations, will not empower an organization to thrive. Boards need to ensure that the companies they oversee assess and protect their information technology infrastructure’s vulnerabilities and create a strategy to put the lid on a crisis quickly should it occur. While representing the interests of investors and shareholders, the board must take a serious look in the mirror and assess the diversity of their board members, balance the composition of their board and foster a healthy board culture and practices.

Board Candidates

In my opinion, not all boards are “healthy boards”. While executives aspire toward their dream goal of independent directorships, their judgement should not be clouded in conducting their due diligence toward a healthy board. No matter how desirable that independent directorship might be, board candidates must thoroughly assess the board before committing to join it. Regardless of the structure of the board you hope to join, you must brand your value, create a strategy and a plan to land a directorship and work tirelessly to execute that plan.

To successfully navigate the board candidate terrain, you must have a keen understanding of the varying dynamics of publicly traded, private held and private equity owned boards. It is critical for you to know the timing of their board succession, candidate evaluation and decision making timeframes. There is a definite window of opportunity and particularly on the publicly traded company side of the equation. This guide will give you the knowledge you need in how board members are “recruited”, as well as their preference for insiders versus independent directors.

Going Forward

Regardless of whether you are a current board director or a candidate for corporate boards, this guide will provide the insights you need to help you conduct appraisals that in turn will help you determine a corporate board’s health, effectiveness and balance. Highly effective boards are committed, focused on what matters most and have a collaborative culture enabling them to align fully with the shareholder’s interests. It is essential that today’s corporate boards are thoroughly re-evaluated and re-tooled to ensure future success.


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