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Issue 09 October 2014
US Boards Lack Global Insights
While major US companies increasingly rely on overseas revenue, their boards often remain all-American, reports The Wall Street Journal, citing Egon Zehnder’s recently published 2014 Global Board Index. The results suggest that such homogeneity at the board level may threaten firms' international growth prospects. About 45% of large US concerns have zero non-U.S. citizens as board members, estimates George L. Davis, Jr., co-leader of Egon Zehnder's global board practice. According to the Index, only 7.2% of directors of companies in the S&P 500 index are foreign nationals, representing a marginal increase of 0.6 percentage points from 2008. Yet boards with extensive global expertise "are better able to exploit the upside and minimize the downside of operating overseas," notes Davis.
> Full story: Joann S. Lublin, “At Work: Global Voices Are Absent From U.S. Boards” in The Wall Street Journal (1st October 2014)
For further insight, read 2014 Egon Zehnder Global Board Index
Leadership: Move the authority to where the information is
When people simply follow their leaders you have a recipe for failure, claims former nuclear submarine captain and award-winning author David Marquet. If you want individuals to think for themselves, stop giving orders, convey intent instead. That was Marquet’s conclusion after years of leading teams when he did something unheard of in the US navy. He decided never to give another order again, except for the one to launch missiles, because he felt the decision to harm others was his own ethical responsibility. Suddenly the psychological ownership on board shifted to the team. By turning his leadership style around from “taking control and attracting followers” to “giving control and creating leaders”, Marquet got his team to drive the decision-making process. In the author’s view, shifting authority to people close to primary information sources creates an environment of thought – and of greatness - in an organisation.
> Full story: Captain David Marquet, “Greatness”, based on his book “Turn the Ship Around” on YouTube (8th October 2013)
Human Resources – Corporate Social Responsibility 2.0
Companies have been building their brands through philanthropic donations for many years. But more and more organisations are now integrating charitable work with workforce development by sending their staff on long stints of volunteer work. Human Resources Executive calls this trend “Corporate Social Responsibility (CSR) 2.0.” The shift to embedding staff in philanthropic projects also means an expanded role for human resources executives. They are increasingly being asked to design and promote programs that attract and engage talent and use CSR to develop and re-engage existing leaders. Human resource directors who embrace this inclusive approach are spending a lot more time on CSR.
> Full story: Will Bunch, “Doing the Right Thing” in Human Resources Executive (30th September 2014)
For further insights: Christoph Lueneburger on “A Culture Of Purpose”
Biotech – The Talent Gap in the Boardroom
Great entrepreneurs and executives are hard to find in research-intensive biotech companies. But this lack of talent is not the only major challenge facing start-ups in the sector. With over a 100 biotech companies planning to go public, there is also huge demand for new board members. An analysis of the turnover rate of biotech board directors over the past 5 years reveals that half of all board members are replaced within the first 4 years of an IPO. With so many new IPOs looming, the “biotech sector has never in its 35 year history ever needed as many new board directors as it will in the coming two years”, warns Forbes magazine. Demand is particularly high for financial experts able to chair audit and compensation committees; and for C-level executives with a track record of building emerging companies.
> Full story: Bruce Booth, “Talent - The Biggest Issue In Biothech Boardrooms Today” in Forbes (25th September 2014)
More: Egon Zehnder's Biotechnology Practice