10 Trends to Watch That Can Help Companies Build Effective Boards

Just as companies are having to evolve around everything from product delivery to supply chain sourcing, corporate boards, too, are transforming. Certain common themes have emerged in the transformation of company boards’ strategic focus, as well as their structure and make-up.

Below are 10 trends that were the hot topics of discussion at a recent thought symposium for directors, the WomenCorporateDirectors’ Americas Institute. These trends show how boards are changing and seeking to become even more effective in contributing to their companies’ strategic vision and bottom line.

1. Cybersecurity is the board’s problem too. Since the Target breach more than a year ago, there has been a lot of pressure on CEOs to get up to speed on their companies’ cybersecurity measures and to be prepared at all times to answer board members’ constant questions on the topic. But board members also have a responsibility to be up to speed on how well their company is protected against cybersecurity threats so they can help direct the company forward. Major security breaches such as the Sony hacking have been a wake-up call that all companies are vulnerable to cyberattacks—not just financial firms. “It can happen to any of us,” says Kay Ellen Consolver, former international treasurer at ExxonMobil who now serves on the supervisory board of Thyssen Petroleum. “While the executives of a company are running operations, we on the board have to get them to think about the things that haven’t happened yet.”

2. Emergence of new board committees. One way that some boards are addressing more urgent concerns such as cybersecurity is by adding new committees to the existing board structure. Professor Liora Katzenstein, co-chair of WomenCorporateDirectors’ Israel Chapter, remarked recently: “… visionary boards now include new specialized committees such as strategy, risk, environment, technology, innovation, corporate social responsibility and digital social media.”

In speaking on a panel at a WCD Americas Institute meeting, Eileen Kamerick, a director at Associated Banc-corp, the Legg Mason closed end mutual funds board, and Westell Technologies, Inc. said that regulatory issues can cause a board to establish standing committees to ensure that these matters get the right level of attention. “Management has the primary responsibility, but it’s the board’s responsibility to make sure it is done correctly.”

3. Growth of advisory boards to supplement board knowledge. In addition to new committees within the formal board structure, companies are employing advisory boards around specialized areas—using these groups as a task force with deep knowledge. Claudia Kotchka, an advisor to the Institute of Design at Stanford University and a director at BlackBerry, created a design advisory board when she led innovation at Procter & Gamble, bringing in people from different companies in other sectors who could bring broad experience solving their own design issues. “When you’re in your own industry, you are just way too close to it,” says Kotchka. “But these people who were independent would come in with no agenda, and help us when we got stuck.”

4. “Professionalization” of boards opening doors for women. Shifting board priorities may be opening up boardrooms to more women directors as boards become more “professionalized” around areas such as audit and compensation. While the trend of more women populating audit committees started more than a decade ago with Sarbanes-Oxley, Eileen Kamerick explained, the scrutiny around compensation might also present opportunities for women. “Boards need to populate this committee with directors with true expertise, and women with HR backgrounds could fill these roles.”