The Secret to More Effective Corporate Boards: Give CMOs a Seat
The boards of major corporations serve one primary purpose: Maximize shareholder value. But are today’s corporate boards set up to drive both the top and bottom line growth necessary to achieve this lofty goal? The featured speakers at Tuesday’s Neustar Connect Future of Corporate Board session were in agreement on this point: Most boards do not have the kind of balanced representation necessary to maximize their success. How to improve corporate board representation for better results was the focus of a fascinating panel discussion between Shellye Archambeau, CEO of MetricStream and Paul Caine, Chairman of the Board at Tremor Video (now Telaria), moderated by Eduardo Tobon, Partner at Spencer Stuart. The conversation -- which took place on September 12 at Cipriani New York -- focused around the key value CMOs provide at the corporate board table.
The session started with the state of overall corporate board diversity, which, per Tobon has made great strides when it comes to gender diversity, with the number of female board members having grown “50% over the past 5 years.” Still, all the speakers agreed an imbalance of represented roles persists. Tobon said that 40% of existing boards are made up of active or retired CEOs, with Telaria's Paul Caine adding that the domination of those with financial roles isn’t moving corporate boards in the right direction.
“Non-financial roles makes a company stronger just as achieving gender balance does,” Caine said.
All this focus on the bottom line doesn’t effectively move top line growth, a key gap that most of today’s corporate boards aren’t yet set up to close. The lack of marketing representation on boards is a pain point smart companies would do well to address, all agreed, if they want to win in today’s consumer-centric market. After all, who is better suited than CMOs to understand the customer and develop plans to effectively drive top line growth?
Shellye Archambeau of MetricStream addressed the fact that Marketers are not tied closely enough with the strategies driven by their boards of directors. Board strategies “should be informed by the voice of the customer,” she said. It’s marketing departments’ domain, she said, to develop and put into practice the kinds of customer-centric playbooks that maximize top line revenue.
Caine agreed, saying that just as boards spend time with product and technology groups to understand their roadmap and capital expenditures, they also need to embrace the CMO to understand the roadmap of the marketing organization.
Boards of major corporations need to accelerate their bottom line and top line business trajectories during this pivotal and fast-changing time. There are unprecedented proxy fights taking place because some investors believe boards are not moving fast enough in this effort and they want a seat at the table to drive change. Perhaps that has something to do with the imbalance of operating roles that sit on a typical board in today’s environment. Perhaps it’s time CMOs got a seat at the table.