Our own Rich Floersch, Senior Strategic Advisor for the Center and HR Policy, spoke on an Equilar webinar this week on the role of the CHRO in the boardroom. The webinar also featured Center member and ITW CHRO Katie Lawler and Leah Malone, Director at PwC’s Governance Insights Center.
According to Pwc’s unreleased 2022 Annual Corporate Director survey, 77% of boards report an increased focus on talent and human capital topics and 88% indicate that hiring and retention is very important to their organization. This is not surprising given the significant changes that have occurred in the workforce requiring organizations to re-consider their approach to the talent they have and the talent they need. Boards are responding by expanding their committee charters and span of oversight beyond executive compensation and CEO succession to include broader topics like culture, the leadership talent pipeline, DE&I and human capital scorecards.
Ms. Lawler indicated that “the stage is bigger” for CHROs today to meet the board’s growing expectations and discussed how her role has shifted in recent years from being a functional leader to a key enterprise leader. The panelists discussed several success factors for engaging with the board and preparing for board discussions:
- Focus on the formal agenda. Have ongoing dialogues with the CEO and lead director to understand what issues and initiatives are important. Ask questions about the materials provided. Is this information helpful? Is there a better way to tell the story? What should we include in the materials versus discuss? What level of detail do we provide? What is the cadence of discussing an issue before a decision can be made?
- Consider the informal agenda. Anticipate questions and topics that a director may raise. Understand what the hot issues are for your directors who sit on different boards. Be prepared when a director wants to take a deeper dive on an issue not included on the formal agenda.
- Be proactive. Make suggestions for new materials, take the time to educate board members on unfamiliar topics and be transparent with areas where the company is not satisfied with performance and discuss improvement plans.
- Engage stakeholders. Partner with investor relations leaders who can provide important feedback. Take the opportunity to engage directly with investors to get a full view of perspectives.
- Seek opportunities. Give visibility to senior leaders to present to the board. This allows directors to interact with bench strength talent.