Directing Differently Abroad
from
Spring 2001
by Avery Hunt
Just because more boards have global representation among their
directors doesn’t mean that they’re culturally globalized. So suggests
a survey by Egon Zehnder International. The search firm found only one
characteristic common to boards worldwide: a commitment to making a
profit. All 188 companies in 24 nations surveyed in Europe, Asia, Latin
America, and North America ranked this as the top priority of their
boards.
Thereafter, how boards operate, and how they are compensated, varies greatly continent by continent. Examples:
Stock ownership by directors: Among North American companies, 54% require board members to own shares. Australia came in second with 47%. Asia trailed the field with 10%.
CEO succession: This is an important issue in North America, where 47% of the companies surveyed said their boards spent time on the subject, yet in the rest of the world, the average is about half that.
Outside directors: 82% of the companies in Australia and 74% of those in North America said their non-executive directors met independently of the managers sitting on the board. In Latin America, the percentage fell to 5%. Are CEOs told what was discussed at such meetings? “Always,” reported 61% of North American companies. “Sometimes,” according to all the Latin American companies.
Number of board meetings per year: Six to eight is fairly common. However, 33% of the Latin American companies held a dozen meetings or more; only 2% in North America made such a claim.
The time it takes a director to get up to speed: About half of all companies said it took six to 11 months. But 43% of the Asian companies said their directors could do the job within five months, versus 7% in North America. In seeming contrast, in Asia only 5% of the companies offer formal training for board members versus 58% in North America.
