Corporate director nominating processes are increasingly focused on subject-matter competencies as an important criterion in populating boards. In many industry sectors, evolving economic, regulatory, competitive and technological factors are creating board agendas of previously unanticipated complexity and difficulty. Shifting, broader and more diverse organizational business portfolios are placing greater pressure on oversight responsibilities. Depending upon the type of board, and the scope of its work and challenges, very different directors with different skillsets are likely to be required. What are the director competencies the organization needs to succeed? To provide meaningful support to senior management? The effectiveness with which a board provides oversight and direction will be enhanced by nominating candidates with an affinity for the organization’s strategic direction and related challenges.
Yet when it comes to adding new competencies to the board, compliance need not be at the top of the list. That’s not meant to diminish the board’s fundamental compliance oversight responsibilities. Nor is it meant to denigrate the important function compliance plays within the organizational profile and the substantial value attributed to the contributions of the compliance officer. Rather, it’s meant to acknowledge that there are many other subject-matter competencies and areas of expertise that warrant board membership before compliance. It’s meant to acknowledge that compliance goals can be achieved at the governance level by appointing directors with character and analytical competencies that will sharpen board oversight capabilities. It’s also meant to recognize a growing threat of confusion at all levels of corporate leadership as to what constitutes “compliance,” how it differs from the expanding role of the general counsel and how the two functions can be better coordinated.
