Diverse company board need of hour
Close to three-quarters of board directors believe that a chief concern for them is to align boardroom talent with evolving short-term and long-term strategy.
There is an intense focus on the board composition given that it requires greater diversity in perspectives and expertise, an understanding of the competitive and disruptive environment and dynamic technology trends, according to a KPMG survey titled Building a Great Board, conducted by KPMG’s Audit Committee Institutes.
“It is imperative to have a board with the right mix of people as it ensures the company and its people grow holistically. A diverse mix of viewpoints and backgrounds also enhances multifaceted, collaborative plans for short and long-term growth setting the company up for success. A board room needs to be as dynamic as the environment outside,” says Mritunjay Kapur, head of risk consulting, KPMG in India. Significant barriers exist to building a high-performing board, says the report. The barrier most frequently cited by survey respondents in India was finding directors with both general business experience and specific expertise needed by the company (70%). Resistance to change due to “status quo” ranked second (61%), followed by identifying the talent the board will need in three to five years (49%).
A successful board will change proactively and disrupt itself, before a competitor forces disruption upon it.
To help facilitate robust boardroom conversations about board composition and succession planning, and provide some insights to assist boards as they tackle the difficult challenge of building and maintaining the “right” board, KPMG surveyed more than 2,300 directors and senior executives across 46 countries including 71 respondents from India.
Close to 44% of the Indian respondents said that they see room for improvement when it comes to the board’s overall ability to probe management strategic assumptions and help the company navigate an increasingly volatile and fast paced global environment.