Nominating and Governance Committee Structure - NACD BoardVision
What star qualities do you need to look for when selecting a director to chair the nominating/governance committee? Bonnie Gwin, vice chairman of Heidrick & Struggles, and Thomas Bakewell, board and CEO counsel at Thomas Bakewell Consulting, share ideas.
Christopher Clark: To quote Adam Epstein, author of the The Perfect Corporate Board, great strategy starts in the Nom/Gov committee. I'm Chris Clark, and this is BoardVision. I'm joined today by Bonnie Gwin of Heidrick and Struggles and Tom Bakewell of Thomas Bakewell Consulting. Bonnie, depending on what your definition of best is, why should the best director on the full board be the chair of the Nom/Gov committee?
Bonnie Gwin. In my opinion, it is an incredibly critical role. You're talking about a director who really is helping guide the board in not just developing a great composition for the board that is strategic and focused and has great talent, but also a director who understands the culture of the company and the board that they're trying to build. And that says that you really need an outstanding director who understands that mix between composition and culture and can work closely with the board to get that right.
Christopher Clark: Tom, I forgot to mention that you're a well-known author, and you have great experience with directors and boards. I'm not going to ask you to disagree or agree with Bonnie, but what are your thoughts?
Thomas Bakewell: Well Bonnie is spot on in terms of composition, having the right team around the table. The other magic that you need in a terrific Nom/Gov Chair is somebody who can draw people out. Somebody who can spot talent. Somebody who can make sure everybody gets heard. Somebody who really knows how to build the team. And coming from a baseball town where we have a pretty good manager and coach that wins a lot of World Series, we know the value of having a great person who can draw everybody out and get the team to work together. It's really getting the team to work together. And using a lot of the tools that are available today. One of the trends in tools is evaluations of boards, much more thorough and in-depth evaluations. Not just check the box or check the list. But in-depth individual evaluations of the boards to know what's really going on in the board room in and among each other.
Christopher Clark: I want to talk to both of you about the interrelationship between different committees. The NACD just held a combined audit and risk advisory council. It's the first time we've ever done it. And it was invaluable for both sets of committee members. How do you feel about that, whether it's audit and risk? Whether it's compensation and Nom/Gov? Do you think those interrelationships of committees should be enhanced or promoted?
Bonnie Gwin: Generally speaking, transparent communication across all the committees of the board is essential. It's essential for a high functioning board. And in particular where you have for example nominating compensation that really there's a lot of interplay between the two committees and the issues they're addressing. And I think it's important to ensure that there's good transparent lines of communications between those two committees, but frankly across the whole board.
Thomas Bakewell: The magic ingredient is how people work together. And part of that, the key element is how they communicate. The old approach to boards was everybody showed up the day before the board meeting, went to the committees. A lot of times people went to every committee. What's the point? You don't have the time. You don't have the energy. You don't have the resources today. So how do you have a board where everybody trusts each other, and they communicate. If you're not on the audit committee and important issues come up and you need to know about it, can you simply pick up the phone and reach out to the audit committee chair, or is there another process that's very helpful for you to get the information you need?
Christopher Clark: For our viewing directors, give us one last piece of wisdom. Bonnie and then Tom.
Bonnie Gwin: The piece of wisdom I would share is the importance of long-term succession planning. And we've talked about that several times. But I really think, looking at board composition, board dynamics, not just this year, but over the next four or five years, for any board is really where it's at and very important.
Christopher Clark: Thank you. Tom.
Thomas Bakewell: And what I would say my secret sauce is, it's not so much the particular talents, which everybody can look at a resume and see what somebody has. They're going to see if oh they're a CEO, they're skilled in marketing. The real magic is what is their true personality? Are they a driver personality? Are they a curmudgeon? Are they, and sometimes boards need curmudgeons.
Christopher Clark: Please don't look at me when you say that.
Thomas Bakewell: I understand. Of course I'm not picking a fight here. But is somebody a strategic thinker? Or is their skillset not a strategic thinker but taking strategy and converting it into action. What have they done in their past experience that really makes them qualified for this role? And strategically thinking through what we know.
Christopher Clark: Well I think we've got all the synapses popping. I wanted to thank the both of you for joining me today. If you'd like to learn more, whether in terms of research, insights or commentary, I encourage you to visit the NACD site or the Heidrick and Struggles site, or find Tom's book. All three resources are going to be great to keep the conversation going. I'm Chris Clark, and this is BoardVision.
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