Is Your Board Built for Change?

4. “Rightsize.”A board must have just the right amount of members. Too small and it won’t have the requisite breadth of skills. Too large and it won’t be nimble enough to make quick decisions or adapt to change. Pfizer, Amgen and Merck all have about a dozen members. This decision is really organization- and industry-dependent and can be aided by regular reviews and skills audits.

“While board stability is a good thing, stagnancy is not. It is essential to get new blood in every few years.”

5. Encourage managed turnover.While board stability is a good thing, stagnancy is not. It is essential to get new blood in every few years. Oftentimes term limits (or tighter term limits) are the answer for this.

6. Prioritize market expertise. A company or other organization must know its changing marketplace and adapt its board to it. Today’s life sciences landscape, for example, is increasingly driven by reform taking place in healthcare. On Amgen’s board is Judith Pelham, president emeritus of Trinity Health. All boards should continue to recruit and embrace members who truly understand where markets are headed and—as in the case of the expanding influence of large health systems within the life sciences— understand the shifting of decision-makers.

Building a better, more agile board is a challenge. It is also something that organizations should strive for to remain viable and competitive in their markets.