This blog post will discuss the latest approaches that successful boards are taking to navigate the key issues companies are facing today. This post is based on a recent NACD Florida panel discussion featuring Lisa Edwards, Fortune 500 public company director at Colgate Palmolive and Diligent Institute Executive Chair, Victor Arias, Managing Partner at Diversified Search, and Dawn Zier, director at The Haine Celestial Group, Spirit Airlines and Prestige Consumer Healthcare. 

How are boards adjusting their composition and culture to address new issues?  What new training is being adopted to prepare current board members for today and tomorrow’s challenges?  What role can boards play to enable successful transformations and set the right organizational tone?   

Our panel broke it down into “The four Cs of board governance”:  

• Board composition  
• Board competence  
• Board communication 
• Board culture 

Board composition 

Lisa Edwards begins by grounding the discussion in statistics from Diligent Institute’s Board Diversity Gaps report, a global and comprehensive view of board composition globally. “Things starting to change slowly,” she says. “Around 33% of board seats in the S&P 500 are held by women. This percentage is about 27% of board seats globally. Women are also three times more likely to bring new and diverse backgrounds in areas like ESG.” 

How do you make sure you have the right people with the right backgrounds on the board? Victor Arias advises a clear strategic path: “You have to understand the future of the business. That dictates what you need in your board’s collective experience. The skills matrix still works to identify gaps and catalogs the current skillset the board does possess.”  

Board competence 

AI, cyber, digital transformation, oversight of corporate culture and climate risk are rising on the board agenda. How can you upskill existing board members on these and other emerging governance topics? 

All panelists hit on the importance of board certification programs. It’s impossible to add a subject matter expert to the board for every issue that bubbles to the top of the agenda, but it is possible to upskill on those that are the most relevant to the business and to stay abreast of trends and new developments.  

“You don’t necessarily need to get a master’s in cybersecurity,” says Edwards, who happens to be getting a master’s in cybersecurity herself. “Take a certificate program! You need to be conversant and able to understand these things. Be able to ask the probing questions, and make sure these questions land.” 

“It’s not only important to be able to ask the right questions. You also have to be able to understand the answers you get.”

-NACD Florida session participant

Board communication 

As the board agenda grows, how do you create space to consider new topics? How can you ensure alignment on priorities? Edwards touches on the role of the board chair or lead director. She touches also on what she calls “osmosis of learning,” – people who sit on multiple boards who can source best practices for communication. Most importantly, if something’s not being talked about, raise that with your lead chair and get a reason why.  

Arias notes that some directors have to get much more involved with management. “There’s more activity coming out of this economic cycle,” he says. “This presents opportunities for the board to dig in a little bit more – perhaps through the committee chairs.” 

But, as Dawn Zier notes, boards still have to respect the distinction of oversight: “If a crisis occurs, the board tends to get more involved. One thing I like to do as a board member is to spend a lot of time with the CEO before I join to ensure that there’s the right level of trust between the board and management when it comes to running the organization versus providing strategic oversight.” 

Board culture  

Finally, and perhaps most importantly, how can the board build and maintain an effective culture? Arias responds: “Culture is bred by board leadership. They create the right environment of trust so that the board can openly share views.” 

He calls out four biases to avoid: 

• Groupthink 
• Not soliciting feedback from everyone 
• Seeking affirmation of the board’s current view 
• Always supporting the status quo   

And, as Edwards points out, as you look to influence or change board culture – it can take time. “Boards don’t turnover all that much,” she notes. “Make sure you’re intentional about evaluations and that you take those results and do something with them!”