10 A JOURNAL OF COMMUNICATIONS AND CORPORATE RELATIONS m ISSUE 10 m SPRING 2016 THE BOARDROOM ISSUE View from the top table sarah hogg Confessions of a serial director chair at two tables Sony & Chugai’s osamu nagayama ceos change rank – power sharing in brazil Ford Foundation’s darren walker drives the agenda against inequality quite contrary Save a seat for dissent open for business The diversity debate good samaritan To the rescue of a Portuguese institution Plus the language of business dress how unicorns risk extinction Brunswick is an advisory firm specializing in critical issues and corporate relations To download and share Brunswick Review stories go to www.brunswickgroup.com/review Download the iPad app at www.brunswickgroup.com/review/app You can follow us on Twitter @BrunswickReview Highlights from this and previous issues are also available on LinkedIn editor-in-chief Jackie Shorey [email protected] print production deputy editor MerchantCantos Carlton Wilkinson designer printed by The Brunswick Review is printed Mia Song CPI Colour on Redeem 100% Recycled, made using post-consumer waste fibers cover illustration associate editor and manufactured without the use Francesco Bongiorni Edward Stephens of any secondary bleaching project manager feedback Mallory Merge [email protected] Copyright © Brunswick Group LLP 2016 decades ago, the boardroom felt like a cozy, wood- list must be employees, customers and suppliers, all of paneled club for the rich and powerful. Today, there whom can express themselves increasingly effectively. is no safe haven, and boardrooms are under scrutiny Any one of these stakeholders, or combination of them, from almost every one of their stakeholder groups. are there to test a board, often to breaking point. In this issue of the Brunswick Review, we hope you will The connected world has been central to creating find some stimulating perspectives on how boards are this environment of perpetual exposure and challenge. dealing with this demanding new reality. The truth is, we The most effective leadership not only recognizes this, could have created a whole publication on almost any but embraces it. As William Blake said, “Opposition of the topics covered. But by viewing them collectively, is true friendship.” through the lens of our global contributors, these topics The good news is that there is a trend toward a dynamic help outline an emerging international best practice. ecosystem for management and non-executive directors Brunswick has built its reputation on dealing with the to work together to tackle a complex world. Alongside toughest challenges and most critical moments that the traditional oversight of operational and financial corporate leadership teams face. It has often been during performance, the boardroom is often the place where periods of intense pressure that we have had the privilege the bigger issues of purpose and broader social value are of being in the boardroom, witnessing at first hand the debated. And executives are looking to non-executives difference between high-performing, cohesive teams and for insight and perspective, experience and judgment, ones fractured by dysfunctional relationships. and even – dare one say it – wisdom. What has become clear is that routine competence in Boards must act as a mirror of the outside world, one governance and fiduciary duty is necessary but no longer that is only getting more complex. The evidence is sufficient for a board’s survival. Directors have to be increasingly clear that companies that fail to embrace able to grasp internal and external issues, agendas, and diversity and inclusion, or to engage with the big issues dynamics in order to navigate the complicated currents in our society, will lose out. surrounding major organizations. In all of this, our deep-seated belief is that while there Poorly structured or ineffective boards are now much is not a single formula, the underlying values of honesty, more likely to be ruthlessly exposed. Our clients in transparency and openness to change are crucial. all sectors are facing increased and more vociferous At times of stress these qualities will be tested more shareholder activism, particularly in the US. But even than ever. We believe that the most successful boards in this environment, meeting the demands of equity will walk toward risk and challenge with a boldness investors and debtholders – who for a long time were and honesty that defines them as part of the solution, the dominant interest group for boards – is now only not part of the problem. one consideration of many. Multiple stakeholder In a way, the board itself needs to be seen as an activist groups expect to be heard and properly engaged with, seeking out the best possible solutions to the challenges and are increasingly effective at voicing their concerns. its organization faces. Never before has so much Regulators have activist agendas, as all our financial been expected of board members, but equally the services clients will testify, as do politicians and the opportunity to contribute and provide leadership media. Digital and social media have helped other has never been greater. stakeholders such as NGOs and special interest groups to adopt an activist approach. And at the top of the activist sir alan parker – Chairman, Brunswick Group brunswick review · issue 10 · spring 2016 3 guest contributors Edward Speed Siobhan Sweeney Osamu Nagayama Sarah Hogg — Chairman, — Business lawyer — Chairman, Sony; — The first woman to chair Spencer Stuart and academic Chairman and CEO, a FTSE 100 company PAGE 8 PAGE 13 Chugai Pharmaceutical PAGE 20 PAGE 16 Pedro Moreira Salles Janina Kugel Adi Ignatius Justus O’Brien — Chairman, — Chief Human Resources — Editor-in-Chief, — Co-leader, Board & CEO Itaú Unibanco Officer and Managing Harvard Business Review Practice, Russell Reynolds PAGE 22 Board member, Siemens PAGE 38 PAGE 41 PAGE 30 Tito Mboweni Sukhinder Singh Cassidy Richard Fenning Darren Walker — Former Governor, South — Founder and Chairman, — CEO, Control Risks — President, Ford Foundation African Reserve Bank Joyus PAGE 60 PAGE 64 PAGE 42 PAGE 51 Adrian Ellis Michael Eissenhauer Duncan Pescod Eduardo Stock da Cunha — Director, Global — Director General, — CEO, West Kowloon — Interim CEO and Chairman, Cultural Districts Network Staatliche Museen zu Berlin Cultural District Authority Novo Banco PAGE 72 PAGE 73 PAGE 73 PAGE 76 George Crumb Kathryn Sargent — Composer — Tailor PAGE 80 PAGE 82 FIELD PORTRAITS: PETER ALL 4 brunswick review · issue 10 · spring 2016 contents THE BOARDROOM ISSUE BR10_00_spencerstuart_v23_ms research 6 Introduction 35 Mind games 53 Tilting the scales Brunswick CEO Susan Gilchrist The puzzle of personality types The UAE leads efforts GLOBAL BOARD TRENDS says scrutiny of the board can affect a board’s success in the Middle East to put Board members must adapt or risk becoming obsolete, says Spencer Stuart’s edward speed has never been more intense women in executive roles separated roles oards of listed companies LEADERSHIP are operating under greater scrutiny than ever before, Where CEO and chairman are combined B in a political and social climate increasingly characterized by cynicism 70% While there is a global trend and a mistrust of business. Directors 8 to split the chairman and CEO 37 54 Solitary seat 60% Global trends The end of the party are exposed and accountable to an roles, France, Spain and the US are obvious exceptions. 50% unprecedented degree. BoardsCombining the must roles can be anadapt or risk How nonprofit boards Making progress in India, Under the weight of legislation, 40% effective temporary strategy, as long as the chairman governance codes and listing 30% becoming obsolete, says became more professional one woman at a time requirements, it is easy for a board is capable of stepping back when the time comes to get bogged down in compliance 20% Spencer Stuart’s Edward Speed issues instead of dedicating sufficient 10% attention to strategy and the ability of 0% US UK Spain management to execute it successfully. France Canada Belgium Germany Every board has a responsibility Hong Kong Singapore to oversee management with active questioning, constructive challenge, The role of chairman has changed in Second, running the board and recent years as board work has become running the company are two distinct and support, wherever needed. But more onerous and there is a growing belief activities, requiring different skills. to do this effectively, the board has to that the roles of chairman and CEO are 13A good Sympathy independent chairman will focus for the devil 38 The new math 56 Higher authority be agile, engaged, responsive, diverse best separated. on time-consuming board governance and above all, relevant. First, concentration of power in one issues, freeingAll theboards CEO to take care need of a contrarian Harvard Business Review’s Shariah takes a seat A board cannot fulfill its pair of hands heightens risk. Board the day-to-day running of the business. responsibilities without deep members should always feel free to Boardsdirector, that promote the outgoing according to business Adi Ignatius on a different way at the board table knowledge of the company and the challenge the CEO’s decision-making CEO to the role of chairman need to process. When the chairman is also consider very carefully a dynamic in context in which it operates. That the CEO, directors can feel uncomfortable which alawyer chairman is sitting Siobhan in judgment Sweeney of measuring CEO performance means it needs to keep pace with and at a disadvantage – although the over his or her successor. This can such things as disruptions to the presence of a lead director (or senior introduce a layer of complexity to what business model, digital transformation independent director) can mitigate is clearly the most important relationship and cybersecurity. this problem. in the business. Investors are responding to those pressures by monitoring board view from the us effectiveness and calling for more S&P 500 COMPANIES frequent changes in board composition.