Business experts broke down the responsibilities and challenges corporate board members face at the Jacob Burns Law Library Monday.
The panel discussion, titled “Challenges in Corporate Governance: Life Cycle of a Board Member,” was a joint event between the business school’s Institute for Corporate Responsibility and the law school’s Business and Finance Law Program. After remarks from University President Thomas LeBlanc, GW Law School Dean Blake Morant and School of Business Dean Anuj Mehrotra, panelists spoke about the diversity of board members and the longevity of a career in business.
Cynthia Glassman, a senior research scholar at the ICR and former member of the Securities and Exchange Commission, moderated the panel. Glassman’s questions focused on the duration of a board member’s tenure from their recruitment by a company until their retirement.
Ellen Zane, a CEO emeritus at Tufts Medical Center and the vice chair of the Board of Trustees, said that while some companies use recruitment firms, personal networking is the primary means by which companies connect with potential board members. She added that shifts in the needs of a company often affect whether a candidate ends up getting a job.
“People need to understand – it’s about the match,” Zane said. “It’s about what a company needs at a particular moment in time and whether you bring to the table the skills, abilities, talents and personal stuff that that particular needs.”
She later said that some aspects of the recruitment process were changing, citing some companies’ growing reluctance to hire professionals from academia, who they feel have “not been in the trenches” for a while.
Robert Lamm, an independent senior adviser to the Center for Board Effectiveness at Deloitte, said the recruitment process – which “doesn’t stay the same for 20 minutes” – has evolved from recruiting mainly from the same set of men to embracing diversity in terms of both gender and skill.
“Who do you know? Who’s a member of the club? Almost invariably, with very few exceptions, it turned out to be a man,” Lamm said. “With the demands that are being placed on companies now by investors, that process is changing. There are a lot of studies out there showing a correlation between diversity and better performance.”
Lamm said the role of a company’s board of directors as a body that conducts oversight and audits the company’s finances means that when companies aren’t doing well, the public turns to the board.
“When anything goes wrong at a company, media – among others – will be the first to say, ‘Where was the board?’” he said.
David Motley, a managing partner at BlueTree Venture Fund, said companies are looking for board members who are willing to “ask tough questions” to make sure that the firm is functioning properly. He said he is heavily involved in oversight and ensures the accuracy of his company’s financial numbers and exposure to risk.
Toward the end of the discussion, Motley argued against the use of term or age limits for board members. He characterized the use of such limits as a way to avoid a discussion about how much value a board member is actually adding to a company.
“I really think it comes down to performance,” he said. “The reason people, I think, are inclined to talk about term limits is because it allows them not to have a tough conversation.”