Executives increasingly recognize the importance of periodically refreshing the board. According to "What Directors Think," a new study by NYSE Governance Services and executive search firm Spencer Stuart, the majority of directors feel it is essential to employ processes to refresh the board's ranks on a regular basis, with 51% rating it as important and another 16% as critically important.
Routine evaluations are the best tool to encourage refreshment, the survey found. Half of directors supported the idea of an age ceiling policy, while a quarter favored term limits. The top five attributes sought for today's boards are financial expertise, industry expertise, CEO experience, information technology and global experience. Those surveyed emphasized risk as a critical concern and a key asset for prospective board members. Further, experience with cyberrisk mitigation was a top attribute they look for when appointing a new corporate director.
Boards also recognized that they need to better understand risk, agreeing that increased knowledge about the oversight process would dramatically improve their efforts, and a third of respondents supported the idea of a separate committee to improve risk oversight. Four out of five directors also said that more time for strategic planning was the top item on their wish list.