In a rapidly evolving business landscape, public companies must prioritize dynamic governance to thrive and navigate new risks. Effective governance involves a range of considerations, including strong leadership, effective collaboration and communication with the CEO and executive team, a strong mix of expertise and perspective, and a strategic approach to board refreshment.
Two new chapters, authored by Spencer Stuart’s George Anderson, Jason Baumgarten and Julie Daum, are included in the guide on Board Structure and Composition, which is part of The Public Company Series by J.P. Morgan and the NYSE.
New Chapters
Formal board turnover policies combined with other refreshment tools and regular board assessments help ensure the board has the right mix of directors to effectively oversee the CEO and leadership team while advocating for shareholders.
Tenure limits and retirement ages
Tenure limits and mandatory retirement ages are useful tools to help boards evolve, but they should not be the sole mechanisms for board refreshment. Top-performing boards are strategic and deliberate about building a multi-year succession plan for the board’s makeup that enables them to bring in exceptional talent.
Board, committee and director assessments
High-performing boards approach evaluation thoughtfully, creating mechanisms to identify strengths, weaknesses, and growth areas to meet the organization’s evolving needs. While these mechanisms may change, their core objective is to provide clear performance assessments, highlight areas for improvement, and foster a culture of continuous development for board refreshment.
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