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Seats at the board do not open frequently, yet the skill set mix may need to change more often given accelerating trends. Perhaps it is not surprising that future-focused boards are now undertaking an annual review of skills and experiences and identifying instances where turnover may be needed. This represents a significant departure from tradition where turnover has been driven more by voluntary attrition or age limits, and boards have been reluctant to make needed changes in a timelier fashion. Simply bringing in people with different expertise is not enough, however. There must also be ways for them to impact the conversation and be included in board decisions.
Giving time and space to the variety of perspectives is achieved by some boards through committee structures and assignments. One of the noteworthy changes in board structures has been to create a standing technology committee. In 2022, 12% of S&P 500 boards had these committees, up from 8% in 2019. In proxy statements, the key responsibilities of these committees include innovation. Another approach is to expand the role of the risk committee by increasing the horizons and definitions of risks to look for potential disruptors, such as “gray rhinos” (highly probable threats) and unintended consequences.
Given the average board size, directors are clear about the implication that there will be trade-offs in terms of skill sets. For example, one director noted their board has considered a chief information officer (CIO) who can speak to emerging technologies while understanding business implications of cyber risk rather than a chief information security officer (CISO) who is specifically versed in cyber risk. Each board is unique because it is made up of a combination of individuals, yet future‑focused boards are clear they need to include individuals who are different from past candidates.