Lessons from Global Boardrooms

What lessons can directors in the United States learn from their international peers?

A recent BoardVision^TM podcast episode, “Inside Global Boardrooms,” explores the themes and practices dominating boardrooms around the world and how corporate governance in the United States compares to governance in other countries. In the episode, Friso van der Oord, NACD senior vice president of content, speaks with Mary McDowell, a board member in the United States and United Kingdom, and Rich Fields, head of the Russell Reynolds Board Effectiveness Practice.

Here are a few highlights from the episode.

Board composition and tenure should be a top priority. An agile board structure is essential in today’s evolving business environment. Regular board refreshment cycles help ensure that directors bring the relevant experience and skill sets needed to tackle new challenges, including emerging technologies such as artificial intelligence. Unlike the United Kingdom, which disqualifies directors as independent after nine years, the United States has no overarching law to regulate how long a director can serve on a board. Boards should adopt an internal practice of refreshing the board periodically—whether by age, tenure, or other benchmarks—to maintain the right mix of seasoned leadership and fresh perspectives.

Senior independent directors can provide additional oversight and support. The senior independent director (SID), a role formalized in the UK Corporate Governance Code, acts as an intermediary between board members and as a key point of contact for shareholders who wish to engage with someone other than the CEO or the board chair. The SID also conducts a performance review for the board chair and leads the recruitment process when the chair role needs to be filled. While the senior independent director role has been around for nearly 20 years in the United Kingdom, US boards can incorporate a similar position to enhance board dynamics and increase transparency between the board and shareholders.

A dual board system sets clear boundaries and embraces the “noses in, fingers out” model. In some countries, the board is split in two to create a supervisory board and a management board. The supervisory board oversees high-level oversight functions, such as CEO selection, executive compensation, and strategy. The management board focuses on daily performance and is accountable for operational results. While public companies in the United States operate under a single-tier board system, directors should offer management more freedom in their operations while focusing on long-term strategy and oversight.

Interested in hearing more? The full episode is available on Apple Podcasts, Spotify, YouTube, and the NACD website.