Filling a seat at the boardroom table is not an easy task. Though directors play an important role in overseeing company leadership, in developing strategic vision, and in delivering shareholder value, a recent survey of directors reveals challenges in building boards with qualified members.1
According to the survey, 53 percent of director respondents believe there is a shortage of qualified board members. And 28 percent say a director currently on their board should be replaced—primarily because that director lacks the necessary skills to serve.
A board with the right skill set is crucial to navigating a company through a fast-changing business environment, especially in an economic downturn. A company may need to add a director with technology or international business experience to effectively execute the company’s strategy. Yet, more than half of the directors surveyed indicate they have difficulty in recruiting board members with technology or international expertise, thereby adding to the challenge of building a board that can provide needed insight for management.
How hard is it to find skilled board members?
Source: PwC and Corporate Board Member, 2008 What directors think survey
Perhaps the difficulty in filling board seats has to do with the perceived risk of taking on the director role and the resulting scrutiny by shareholders, the media, regulators, and employees. One-third of directors surveyed indicate they have turned down positions on other boards because the associated risk was too high.
So, how does a company attract qualified directors? By setting an example: Over 80 percent of those surveyed say that companies with good corporate governance have an easier time recruiting new board members. In addition, boards can also cast a wider net when recruiting—by considering candidates who may be skilled but who have not yet served on a board.