The Diversity Action Committee, together with five leading international executive search firms, namely Egon Zehnder, Heidrick & Struggles, Korn Ferry, Russell Reynolds and Spencer Stuart, have come together to define the best practices in search criteria and processes relating to board appointments in Singapore. This collaboration is an unique initiative in the local context, defining the standard for recruitment of Board Directors among corporates based in Singapore.
Launched on 15 January 2015, this initiative recognises the importance of director choice in improving board effectiveness and corporate governance. Collectively, we share our convictions with companies who our services in order that they may join us in subscribing to the professional practices and processes outlined in the Statement.
Board Composition & Progressive Board Renewal
When taking a specific brief, the executive search firm should regard the assignment in the context of the needs of the Board as a whole to serve the interest of the company going forward. The firm should support the Board in performing an analysis of what other capabilities are or will be required to serve corporate strategy in the immediate future as well as medium term. The conclusions will be reflected in the competencies used to guide the selection of new directors.Risk management considerations should be raised if not already covered in the brief. With ever shorter product lifecycles and proliferation of disruptive competition, Boards that draw their directors from different pools of experience, expertise and social background, would be better equipped to recognise and meet their challenges. Search firms should encourage Boards to actively pursue diversity.Search firms should also engage with clients in developing a board renewal plan that would allow both broadening and progressive rebalancing of capabilities within the board for its continued optimal functioning to serve the interests of the company.
Broadening Candidate Pool and Selection Criteria
To widen the pool of top calibre and diverse candidates for evaluation, search firms should encourage clients to define a broader set of search criteria in addition to having candidates with prior experience as a board member/CEO. Particular attention should be paid to candidates with relevant experience in emerging industries and areas of specialisation.Non-traditional sources should be tapped whilst bearing in mind that candidates should have both depth of expertise as well as sufficient breadth of knowledge and skills to contribute across the entirety of the board agenda.
Supporting Diversity with Women on Boards
Women represent an increasing share of purchasing power at wholesale and retail levels. Yet many companies have an under-representation of women in their boards. To assist their clients in rectifying the situation and providing diverse slates of candidates, search firms should ensure that 20-25% of the candidates are women. Search firms should also aim to have clients interview at least one qualified woman candidate.
Evaluation & Selection
Search firms will prepare candidates for interviews and guide them through the process. Particular attention will be paid to first-time candidates.Search firms will assist clients in their evaluation of each candidate on the shortlist, with advice and comparative reference material, highlight areas in candidates’ profile for attention and clarification in order to make a fair and objective evaluation.In addition to evaluating candidates’ skills and experience, search firms will point out the team dynamics of current boards and how shortlisted candidates’ personal characteristics could complement the boards. Desired personal characteristics for board appointments include courage, diplomacy, wisdom and integrity.In the final selection, search firms will always remind clients to check if the final selection is aligned with the board composition and progressive board renewal planned at the beginning of the search process.
Search firms should advise clients on the changes in team dynamics when diversity is introduced and how best to induct a new director and prepare the board in order to benefit more fully from diversity. Search firms may offer other services as an on-going support to diversity on the board.