Warren Buffet says, “The best way to affect the behavior of board members is to embarrass them.” While this statement may have some truth, there are better ways to advance change for competitive advantage in the boardroom.

To have the board aid in creating competitive advantage is an important mindset. Think of it this way. In a pre-IPO company, a board may decide that the best board candidate is an executive that has taken a company public. The candidate's knowledge and experience in the investment banking world and contacts on Wall Street will add value at the top of the house. But once the company is moving forward, this board member may not have the same value. Now, maybe the strategic plan for the company is to grow the business in China. The board may then decide the best candidate is an executive with extensive knowledge and experience in China. This does not mean that there is a lack of competency in the director that was recruited to help with the IPO. Rather, it is an alignment of knowledge and experience based on strategy and risk. The overall philosophy is that knowledge and experience does not go into perpetuity. Even the best-managed companies aren't exempt from the inevitable clash between whirlwind change and corporate inertia. With the pace of change accelerating, boards need to be flexible and agile. They must be able to understand the task that management has in the 21st century - to be able to quickly adjust to market developments and be wise in reallocating resources to new opportunities.

Creating a 21st century board means making significant transitions towards more future-focused leadership behaviors and practices. Rethinking both how new directors are recruited and successfully retained can provide a progressive focus to a director search. Targeting candidates whose backgrounds speak to these areas will ultimately bring a honed perspective for competitive advantage. Here are a few areas to consider when thinking about your next board member:

Growth: Does the candidate have a track record in growth situations?

Innovation: Does the candidate have experience with innovative cultures?

Ambidexterity: Does the candidate have foresight into new markets while appreciating legacy positions?

For the first time in modern history, we now have technology affecting every single sector in the economy. From agriculture to shipping, companies take inputs and collects data to help drive business. This, as an example of the 21st century business environment, requires directors to be up-to-date and will most probably drive the addition of younger board members. It used to be that in any industry, years of experience meant knowledge, leadership, and wisdom. But if you work in entrepreneurship, technology, or digital media, this framework may be dated. This next generation director’s contributions will be essential to how the very best companies make judgments, forecasts, and decisions. Davos replacement of economists with tech CEOs in high-level speaking slots is an example of how board members may need to be more data driven in the future when weighing in on strategic assumptions and economic potential from technology. There is no check-the-box or absolute right person for your next director. This is a company-by-company conversation. One thing is certain, new people with different experiences will bring new perspectives. Here are a few questions that can help drive the next director conversation:

·         What is the optimal mix of experience and knowledge for our board as the world, economy, and markets change?

·         Who has the breadth and depth in the industry to help address what the company will face going forward?

·         What are the key board and committee leadership skills needed?

Competition can be fierce for certain director candidates making director succession planning a key to company health. Leading companies pay attention to their ability to attract and retain the best people, and this philosophy is no different at the board level. Director succession planning can also help mitigate risk in the case of an emergency exit of a director. On the human side, the shock of an unexpected death can be softened with work that has already been completed in a thoughtful manner. For the progressive board, being proactive in succession planning is a best practice. With the average age of the U.S. director being 60-plus, common sense demands, not only an awareness, but to have some of the pre-work in place. Here are a few benefits gained from conducting director succession planning:

• Plans for the impact of losing aging directors 
• Advances the organization’s strategic and competitive position
• Increases the talent pool of board candidates
• Improves the board’s ability to respond to changing environments
  

Graceful exists. With all the talk about board tenures and lack of competitive advantage in the boardroom, it may be time to ask if your contribution on the board is stale. Is it time to “bench yourself,” as Gehrig “The Iron Horse” did?  At one of my board evaluation facilitations, a director announced plans to leave. The director’s comments flowed smoothly into the conversation about the direction of the company and the skills the next director candidate needed – both issues had previously surfaced in the board evaluation. No finger pointing, no uncomfortable confrontation. Just frank talk amongst exemplary professionals.  The announcement, while a bit of a shock, allowed the board to plan for both the offboarding and the onboarding in a strategic manner. Directors may not share Lou Gehrig’s fame, but his classy departing comments may strike a chord. See this 2-minute clip of Lou Gehrig’s farewell speech.