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Best Practice in Board Recruitment &
Structuring an Effective BoardAnnual Forum 2019
In Partnership With:
About Korn Ferry’s CEO & Board Practice
Annual Forum 20192
When Boards, CEOs, and leadership teams thrive, entire organizations succeed with them. We helporganizations achieve alignment on strategic direction, secure the right people for the right roles, and build theleadership capabilities necessary to deliver superior business performance.
Korn Ferry Expertise Korn Ferry Board Solutions
CEO & Board
Search
• 100% of Board work in Asia Pacific is led by our highly
experienced and dedicated Senior Partners in the CEO &
Board Practice
CEO & Board Succession
Planning
• Our CEO & Board Practice collaborates with our 16 other
Centers of Excellence, both industry and function
Board and Top Team
Effectiveness
Board Compensation
Benchmarking
Building Boards (Spins &
Bankruptcies)
Board Financial Acumen
• Clients range from large listed, to IPO’s, to Small Caps
and encompass most industries and markets every year
• 1 out of 3 board placements have been diversity
placements
• A 100% dedicated Board Services Knowledge
Management Centre supports and connects all work
• Broad-based experience with on average, 150
placements per year in the North America
• Over 94% of all new clients elect to work with us again
The starting point:The speed of change and disruption creates a common dilemma for organizations today…
Annual Forum 20193
We know we need to
transform, but we
are worried about
our ability to do so
with the pace
needed to stay
ahead of key
competitors …
How do we simultaneously PERFORM & TRANSFORM?
AGILITYDrive financial
performance &
operational discipline
in the core
businesses & markets
Transform, disrupt
& reinvent the
business to stay
ahead of rapid
market disruption
PERFORM
Run the
Business
TRANSFORM
Change the
Business
Boards are not immune from the impact of this disruptive change…
Annual Forum 20194
…If the Board is overly focused on governance it can act like an anchor off the back of a boat, slowing down
transformation. The Board must also be a critical friend of management, helping management to anticipate and
shape the future, whilst continuing to monitor, manage and maintain performance. The Board must evolve to a
different model of governance.
Two critical Board modes
Anticipate
& Shape
the Future
TRANSFORM
Core
Governance
PERFORM
Greater focus on
NEDs who can shape
the future of our
organization &
industry.
Greater agility in
reshaping & renewing
Board composition to
match emerging
strategic issues.
Greater Board
focus on the
Transform agenda
as they continue to
focus on their
Perform
(governance) role.
A board culture with more
dialogue and less
presentations.
A culture of partnership
between the Board &
Management with a higher
tempo and more regular
informal dialogue,
brainstorming and co-
creation on key strategic
issues.
Greater focus is required on
▪ Talent Progression (beyond
succession)
▪ Strategic Workforce
planning & Culture
▪ Sustainability
▪ Risk management in the
digital age – (Cyber
security, Social media etc.)
Composition Focus Culture / Partnership Critical IssuesChanges to
How the
Board works
Current Trends in Director Recruitment
Annual Forum 20195
Accelerating need for board succession planning
Board succession is actively increasing due to 9 year rule and board retirement ages.
Changing demand for industry experience
Technology/Telecommunications, Consumer Goods, and Private Equity/Investment
Management, were the top industry backgrounds for new directors
Requesting more diverse and technical expertise
Finance, technology, and commercial (with knowledge across all channels)
represents the expertise most requested of new directors over the past few years
Increasing demand for other C-Suite titles
While 2/3 of directors are either a CEO or CFO, full-time CEOs are reducing their
external board commitments, there are more first time directors
Creating a more diverse board has become a higher priority
Appointing female directors have steadily been rising over the past few years.
5
Our Approach to The Board Search Process
Annual Forum 20196
PHASE 1
ALIGNMENT
PHASE 2
SEARCH
PHASE 3
ASSESSMENT
PHASE 4
APPOINTMENT
PHASE 5
FOLLOW UP
• Align/Define
Director role
specification
• Discussion of
company, culture,
and strategy
• Board Composition
Analysis
• Industry mapping
• Analysis of potential
candidates against
defined profile
• Preliminary
conversations
• Long-list of
potentially
interested
candidates
• Review long-list
with Client
• Agree on
preferred
candidates
• Informal
referencing
• KF interviews and
assesses
candidates
• Short-list of
candidates
• Client interviews
short-listed
candidates
• Formal referencing
• Selection of
preferred candidates
• Offer role and
negotiate terms
• Announcement
• Follow-up /
feedback session
between Korn Ferry
and client
• Review search
quality and
process
• Agree timeline &
process
Ongoing1 2 3 4 5VariableWeek 4-12 Week 3 - 4 Week 1 - 2
Board Composition Framework for defining the ideal Board Composition
Annual Forum 20197
BOARD
LEADERSHIP
COMPETENCIES
What is the ideal
Industry & Domain
Experience to add
distinctive value to
Company's Board?
What motivates and
drives the candidate
to be the Board
Member?
Does he / she have
the required capacity /
bandwidth?
What is the ideal
Board culture and
partnership with
management?
What are the mindsets
& personality traits to
facilitate this?
WHAT YOU DO
WHO YOU ARE
EXPERIENCE
& EXPERTISE
CULTURE FIT
& IMPACTCOMMITMENT
& CAPACITY
STRATEGIC ISSUES
PERFORM - TRANSFORM
AGENDA
What are the
Leadership
Competencies
required to lead and
contribute to
Company Board?
Board Composition AnalysisBuilding a complementary Board that aligns with the overall business strategy
Annual Forum 20198
Core Experience Functional Expertise Current
Committees
Fo
rme
r /
Cu
rre
nt
CE
O
Div
ers
e
Glo
ba
l
<M
ak
e C
lie
nt
Sp
ec
ific
>
Ind
us
try
<M
ak
e C
lie
nt
Sp
ec
ific
>
Ex
pe
rie
nc
e
Fin
an
ce
Op
era
tio
ns
Sa
les
/M
ark
eti
ng
Ge
ne
ral
Ma
na
ge
me
nt
Te
ch
no
log
y
Str
ate
gy
HR
/ L
eg
al
Au
dit
Co
mm
itte
e
Co
mp
en
sa
tio
n
Co
mm
itte
e
No
min
ati
ng
&
Go
ve
rna
nc
e
Co
mm
itte
e
Name (Age)
Title✓
Name (Age)
Title
Name (Age)
Title
Name (Age)
Title
Name (Age)
Title
Collective Board Profile # # #
Key
Remaining Board
Members
Exiting Board Members
Board Composition Sample Board Composition Matrix
Annual Forum 20199
CURRENT
KEY POTENTIAL GAPS
2017
KEY POTENTIAL GAPS
2018
KEY POTENTIAL GAPS
• Digital
Marketing/Media
• Technology &
Innovation
• Voice of the Customer
• Digital
Marketing/Media
• Technology &
Innovation
• Voice of the Customer
• Digital Marketing/Media
• Technology & Innovation
• Finance/Audit
(Successor)
Key
Core competency
Non-Executive Directors
Asi
a E
xp
eri
en
ce
(Pa
rtic
ula
rly
C
hin
a)
Le
ad
ing
ed
ge
eC
om
me
rce
Glo
ba
l A
cc
ou
nt
Sa
les
Vo
ice
of
Cu
sto
me
r
Vo
ice
of
Co
ns
um
er
Biz
In
teg
rati
on
/ O
pe
rati
on
al
Tra
ns
form
ati
on
Po
rtfo
lio
Ma
na
ge
me
nt
HR
& T
ale
nt
Ma
na
ge
me
nt
Fu
ture
Te
ch
no
log
y
Au
dit
/
Ac
co
un
tin
g
Re
mu
ne
rati
on
Inv
es
tor
Re
lati
on
s
Director 1 1 1 1 2 2 1 1 2 2 2
Director 2 1 0 2 2 2 1 1 1 1
0 1 2 2 1 1 1 2 2 2
0 0 1 1 2 1 1 1 2 1
Director 5 1 1 1 1 2 1 2 1
(Current) 0 0 1 1 2 1 2 1 0 2 2 200%
Director 3
Director 4
NED Aggregate Skillset
Lacking
Secondary competency
Structuring an Effective BoardThe structure, composition and internal dynamics of Boards can affect the performance of individual directors and the Board as a whole
Annual Forum 201910
▪ Is the Board clear on the criteria for the recruitment of the next
director?
▪ Is a tailored competency and behavioral-based analysis
undertaken prior to selecting new directors?
▪ Are there any significant conflict of interest issues that could
make it difficult to accept a Board appointment?
▪ Do you believe you can work cooperatively and constructively
with existing directors?
▪ Does the Board have a robust process for handling succession
planning?
▪ Is a contingency plan established in the event that the Chairman
has to step down unexpectedly?
▪ Does the Board, collectively, possess a wide range of competencies
and experience to effectively deal with the opportunities and issues
the company faces?
▪ Is there an appropriate mix of skills, backgrounds, experience, age,
gender and perspectives on the Board?
▪ Do all new directors receive a letter of appointment setting out key
terms and conditions?
▪ Is there an appropriate induction program (including committee
induction) for new directors and continuous training for alldirectors?
▪ Does the Board regularly review its own performance and theeffectiveness of its governance process?
▪ Board appointments are decided by the Chairman with little input
from other directors
▪ Board discussions are dominated by one or two directors
▪ Unreasonable demands are placed on the directors' time.
▪ The Board is too large or too small as compared to similarorganizations
▪ Overuse of external advisers occurs due to skill gaps on theBoard
▪ There is consistent carry-over of agenda items from one meetingto the next
▪ The Board does not periodically review its skills and competencies
▪ Gaps identified in Board assessments are not actioned upon in a
timely manner
▪ There is a lack of ongoing Board succession planning
▪ No formal (or insufficient) Board induction is provided to newBoard members
▪ No regular training or developmental programs conducted for alldirectors
Red Flags
Questions that Company Directors should ask
Structuring an Effective Board Factors to Consider
Annual Forum 201911
The Board should be made of a group of professionals with the right mix of skills
sets and expertise that complement each other.
▪ In structuring an effective Board, the company must consider diversity of its Board members based on mix
of skills, backgrounds, experience, expertise, age, gender and perspectives of its directions that would be
necessary to meet the unique requirements of the company.
▪ The NC, usually led by the Chairman, should be responsible for Board recruitment with the objective of
securing a boardroom which achieves the right balance between challenge and teamwork, fresh input and
thinking, while maintain a cohesive Board.
▪ It is important to consider a diversity of personal attributes among Board candidates, including intellect,
critical assessment and judgement, courage, openness, honesty and tact, the ability to listen, forge
relationships and develop trust, diversity of a psychological type, background and gender to ensure that a
Board is not composed solely of like-minded individuals.
A well-designed governance structure will help Boards to function effectively by:
▪ Clarifying Board appointments with defined terms of reference for each director and Board committees
▪ Improving the balance of skills and expertise of the Board and committees in ensuring that the company's
current and long-term strategies are fulfilled.
▪ Enhancing communications amongst the Board member, management and shareholders.
▪ Instilling confidence in shareholders and the public that the company is well governed.
The Board is required to examine its size to enable it to effectively function and facilitate effective decision
making, having regard to the scope and nature of the operations of the company, the requirements of the
business and the need to avoid undue disruptions from changes to the composition of the Board and Board
committees.
Skills &
Expertise
Governance
Structure
Size
Stages of Board Development
Annual Forum 201912
1. Board & Committee Processes:
Does the Board have Board and
Committee processes for
Information Sharing & Decision
Making that meet compliance
requirements and the needs of
the business?
2. Board Composition &
Structure:
Does the Board have the
requisite breadth and depth
of experience, expertise
and capabilities to be an
asset on the current and
future strategic issues that
matter?
3. Board & Culture & Dynamics:
Does the Board operate as an effective team, with high quality, open discussion
and debate that fully leverages the Board’s diverse capability?
4. Partnership with Management: Does the Board have an open,
transparent and productive partnership with the CEO and executive team?
5. Board Leadership: Is the Chair effectively leading the focus
and culture of the Board and proactively shaping its composition?
6. Individual Director Contribution:
Is each Director contributing fully to Board discussions, fully leveraging
his/her distinctive value?
7. Strategic Alignment & Board
Mandate:Does the Board have a clearly
defined and value-adding role on the critical strategic priorities facing
the organization?
8. Board Strategic Value-Add &
Agility:Does the Board add the required
value in these key areas: i. Strategy & Strategic Agility;
ii. Oversee Company Performance; iii.(Succession Planning;
iv.Risk & Crisis Management; & v. Stakeholder Influence?
Process
Driven
Behaviour
Driven
8 D
imen
sio
ns
Sta
ges o
f B
oard
Su
ccessio
n
FOUNDATION
BOARD
DEVELOPED
BOARD
ADVANCED
BOARDSTRATEGIC
ASSET
Selected Team's Board Experience in Asia Pacific
Annual Forum 201913
HONG KONG JAPAN MALAYSIA INDIA AUSTRALIA SINGAPORE
APAC Non-Executive
Director
Independent Non-
Executive Director x 2
Independent Non-
Executive Director x 2 Board Succession
Non-Executive Director x
2
Independent Non-
Executive Director x 4
SINGAPORE/MALAYSIA AUSTRALIA MALAYSIA MALAYSIA INDIA HONG KONG
APAC Non-Executive
Director
Board Search and
Succession
Independent Non-
Executive Director x 4Non-Executive Director
Non-Executive Director;
Diversity Non-Executive
Director
Non-Executive Director
AUSTRALIA HONG KONG JAPAN SINGAPORE AUSTRALIA JAPAN
Non-Executive Director
x 2
Independent Non-
Executive Director Senior Advisor x 2
Chairman
Non-Executive Director
Non-Executive Director,
Portfolio CompanySenior Advisor
INDONESIA HONG KONG JAPAN HONG KONG HONG KONG
Independent
Commissioner
Non-Executive Director,
AsiaRepresentative
Director
Independent Non-
Executive Director Independent Director
Audrey TanManaging Director, SingaporeCEO & Board Services Global Financial and Technology Markets
Annual Forum 201914
Audrey Tan leads our Executive Search business in
Singapore with a focus on CEO & Board Practice
within Global Financial Markets and Singapore
Corporates. With 20 years of leadership search and
consulting experience in the Asia Pacific region,
Audrey is an advisor to private and public
companies on Board & C-suite search and
succession planning, top team effectiveness and
culture.
Audrey has in-depth of experience and a track
record of success while working with some of the
most well-regarded firms. She works with local and
multinational companies through her consultative
approach to business, combined with her
maintenance of relationships at the highest levels of
organizations.
Before joining the firm, Audrey spent 15 years with
another international executive search firm where
she held several leadership positions. She was most
recently the Managing Partner for Singapore
covering Southeast Asia.
Prior to joining the search industry, Audrey worked at
the Economic Development Board subsidiary where
she was actively involved in early corporate
governance, entrepreneurship and technology
initiatives. She spent her earlier career with Compaq
and Hewlett-Packard.
Audrey holds a B.A. in Economics and Statistics
form National University of Singapore and attended
the Executive Leadership program at Wharton,
University of Pennsylvania.
Fluent in English, Mandarin and several local
dialects, she is passionate about the development of
Singapore and Southeast Asia companies and
talents in the region.
3 Temasek Avenue,
Centennial Tower #09-01
Singapore 039190
Tel: 65 6231 6170
Mobile: 65 9173 2778
Email: [email protected]
THANK YOU
