According to a recent Gartner report, focusing on board of directors' quality and dynamics, reveals that only 38% of company boards possess both high director quality and positive social dynamics. Highlighting the crucial role of general counsel (GC) in enhancing board effectiveness, the report, titled "Critical Actions GC Can Take to Improve Board Effectiveness in 2023," underscores the importance of GC involvement in the board candidate selection process.

James Crocker, Director of Research at Gartner’s legal and compliance practice, based in Stamford, Connecticut, emphasizes the pivotal role effective boards play in corporate governance, strategy, and risk management. Despite this, the report, drawn from a survey of 92 in-house counsel conducted earlier this year, indicates that half of the GCs believe their boards fall short in these areas.

Gartner defines a quality board as one that encompasses a broad spectrum of knowledge, experience, and diversity. The report acknowledges the positive influence GCs have exerted through director onboarding, education, and evaluation, but points out a gap in sourcing and recruiting.

The study identifies the enhancement of director quality and social dynamics as the most significant factor in boosting board effectiveness, potentially leading to a 53% increase in overall board efficacy.

Gartner advises GCs to collaborate with their board’s nominating committee and the company’s chief human resources officer (CHRO) to build a diverse portfolio of potential director candidates. The study warns against leaving director selection exclusively to the board, as this often results in homogeneity, potentially leading to groupthink and a lack of diverse perspectives.

The report further suggests that GCs and CHROs consider the evolving nature of the company’s strategy and the operational environment in their selection process. It cautions against merely replacing departing directors with similar profiles, advocating for a forward-looking approach that aligns candidates' skills with future organizational strategies and changing economic and regulatory landscapes.

The report also critiques the practice of drawing from the same talent pools, which often leads to a repetition of board member profiles and unaddressed skill gaps. It highlights the value of considering unconventional candidates, such as those with strong backgrounds in areas like cybersecurity but limited board experience, who might otherwise be overlooked.

This Gartner report calls for a paradigm shift in board composition and selection, emphasizing the critical role of GCs in steering this change to ensure boards are equipped to meet contemporary governance challenges effectively.