The CEO’s Playbook: Building an IPO-Ready Board

In a striking rebound, the IPO landscape in the Americas has surged this year by over 20% compared to the same timeframe in 2023, with the proceeds from these offerings more than doubling due to the larger size of the deals[1]. This resurgence is led by the healthcare and technology sectors, particularly biotechnology, which alone launched nine deals raising a collective US$1.5 billion. Artificial intelligence (AI) continues to capture the market’s imagination, but investors are increasingly demanding tangible proof of its potential impact. Despite the looming challenges of global geopolitical tensions and the upcoming U.S. presidential election, the robust start to the market and growing investor confidence suggests a promising horizon for public listings, extending beyond large-cap entities to a broader spectrum of companies into 2024-2025.

Drawing on three decades of experience  advising boards and CEOs through complex leadership challenges, we have observed the speed bumps investor-led boards face when transitioning to become more independent. A critical juncture often arrives when financial sponsors perceive a viable route to an IPO. The significance of a board’s capabilities and composition in maximizing a public listing cannot be overstated, yet one of the greatest barriers is often the reluctance of directors to relinquish their positions when it becomes clear that change is necessary. While some boards hesitantly skirt around these issues, the most successful ones embrace a proven pathway to prepare their governance structures for the public markets.

To navigate this transition and effectively prepare for a future IPO, chief executive officers and boards should consider three governance best practices:

1. Board Architecture

The axiom in real estate that “the taller the building, the stronger the foundation needs to be” equally applies to board structure. Recent shifts in corporate governance have redefined board construction to better weather potential challenges. In advance of any public listing, it is essential for boards to address these fundamental governance tenets.

2. Board Leadership

Determining the leadership structure of the board is perhaps the most critical decision post-architecture finalization, influencing the board’s capabilities, effectiveness, and culture:

3. Board Recruiting

The current environment for board recruitment is fiercely competitive, with a pressing need for directors who bring diversity of thought, background, and expertise. When adding additional independent directors to the board, we have found it is important to keep the following concepts forefront when building out the rest of the board.

By adhering to these best practices, companies who are on the path to an IPO can assemble a board that not only meets today’s challenges but also positions the company for sustained success in the public domain.

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Brett Stephens is the CEO of RSR Partners and helps lead the firm’s Board & CEO Services

RSR Partners is a boutique professional services firm headquartered in Greenwich, CT, that specializes in helping Boards and CEOs with their most critical recruiting, selection, and succession needs. The firm was founded in 1993 by industry icon Russell S. Reynolds, Jr. The firm has conducted thousands of projects for Boards and CEOs at public, private equity-backed, and family-owned businesses across a range of industries including asset management, consumer goods and services, industrial, technology, and healthcare. To learn more about RSR Partners, click here.


[1] Data provided by EY Private.

Expect 2024 to Reveal Who is Ready to Lead

Dear Clients and Friends,

2023 was a dynamic and transformative year across the corporate landscape, and so far, we expect this trend to continue in 2024. Leadership in the boardroom and C-Suite has never been more indispensable. From our beginnings as a boutique board advisory firm, to our evolution into a “boardroom-centric” search firm, we are incredibly proud to work with so many companies that believe that great leadership is a competitive advantage, and with candidates who have a genuine and positive impact on the world around them.

One of the ways we celebrate great leadership is with the Russell S. Reynolds, Jr. Chair of the Year Award. The Chair of the Year Award was established in 2023 to celebrate the legacy of Russ Reynolds, an icon of the executive search and board recruiting industry. The award recognizes a Chair who successfully led a Board of Directors through significant business or governance challenges. As featured in Fortune magazine, the inaugural award was presented to Sarah Nash, Chair of Bath & Body Works, at our annual Directors Dinner in New York in October. We were delighted to recognize Sarah’s extraordinary leadership and character. We hope that many of you will nominate a Chair for the award this year and join us at our Directors Dinner in October.

Our Board practice continues to anchor the firm’s activities and provide enhanced insights and connectivity to assist our executive searches across our core practice areas (Asset ManagementConsumer, and Industrial Technology). Our collaborative approach – a hallmark of our firm – helped bring to light some of the trends we expect to be explored by boards and C-Suite leadership teams in 2024:

We look forward to continuing to assist our clients with their most important, complex, and sensitive leadership and governance concerns in 2024. We believe that RSR Partners is uniquely situated in the industry to provide unparalleled access and insight into top-performing business leaders. In addition to our board recruiting capabilities, we offer our clients a broad set of other Board and CEO services. Should you have any important board or C-Suite leadership needs in the coming year, we would be delighted to share our capabilities and expertise to help you. More importantly, we look forward to our continued friendship with you all. 

With gratitude,

Barrett J. Stephens
Chief Executive Officer
Email | LinkedIn | Bio

A Small Firm with Big Results

When Russ Reynolds founded our firm back in 1994, he knew that “bigger isn’t always better.” And so, he purposely created a boutique firm with a truly collaborative and client first culture, and with a goal of providing our clients with “high touch” service and unbiased advice. We started out in the boardroom, focusing our efforts on recruiting directors. As would later be the case with all of our practices, senior members of our board practice would lead and execute every engagement and handle all candidate interface, assessments, references, and client interaction. Russ anticipated that staying small would prove to have a big and lasting positive impact on our clients and help preserve our client service culture as the firm evolved. He was right. For the past 30 years and still today, we have consistently achieved, and often exceeded, our clients’ recruiting objectives, and have successfully maintained long-lasting and meaningful relationships with them. While we have expanded our offerings to include executive search and a variety of advisory services, board recruiting continues to be at the core of what we do.

The demand for outstanding director talent is as high as ever. This is especially the case when considering corporate boards’ ongoing efforts to maintain the right mix of skills and experience and the right balance of gender and ethnic diversity in their ranks in order to enable them to stay ahead of an everchanging world in which their respective companies compete. Often, boards encounter supply and demand imbalances for certain types of candidates they seek. That’s why it is very important that the board recruiting firm can guarantee access to any and all relevant candidates without any exceptions. That is a promise that we have continued to keep with our clients since our firm’s founding. Given our firm’s size and structure, we purposely conduct a limited and distinct number of search assignments at any given time, and our engagement review and acceptance process ensures that at RSR Partners, there is no competition for candidates amongst our clients.

Our extensive candidate sourcing network continues to expand and advance. We utilize our own database, social networking tools, and other internet-based candidate search technologies (e.g., LinkedIn, BoardEx, etc.) that have leveled the playing field between boutiques and large firms when it comes to candidate identification. All partners from all practices are engaged as well for candidate ideas. As such, we have the ability to identify most any candidate who aligns well with a given profile.

The benefits associated with partnering with us to achieve our clients’ most important recruiting objectives are no better reflected than in the continued success we have had in achieving our clients’ diversity objectives. Since 2021, 86% of our board placements were either gender and/or ethnically diverse (it’s important to point out that diversity was one of a number of criteria each of these placements met).

As a small and agile team, we are also known for our thorough and rapid kick-starts to board recruiting assignments. We have always strived to complete our board searches within four to five months. There have been times when searches have taken longer than anticipated, but we have always completed our assignments and have amassed a 100% placed candidate “stick rate” along the way.

If I had to point to one step in the board search process that we have learned goes a long way toward ensuring a successful outcome, it would be to put a great deal of thought and effort at the beginning of the process into creating the candidate profile. This candidate profile development process should be a collaborative undertaking between the board and their search firm, and it can be completed in a short period of time. It starts with reviewing the director skills and experience matrix in the proxy and interviewing each member of the client’s Board, their Chairman, CEO and, depending on the nature of the search, certain members of the executive leadership team. Interviews focus on what skills and experience are needed in the next director and why, as well as the characteristics that make for a great cultural and chemistry fit on the board. Then, we undertake a comparison of what criteria the board currently possesses and identify gaps, which in turn, helps to refine the candidate profile. It is important to note that the matrix in proxies does not always provide an accurate picture of the degree to which skills and experience reside on the board (i.e., checking the box versus specifying the strength of a particular skill or experience each director indicates they possess using a 1,2 or 3 rating.) The interview process is therefore helpful on several fronts – it provides a deeper understanding of skills and experience that all the directors contribute, determines what the board is looking for in its next director, and creates alignment amongst the board members around the candidate profile.

Before finalizing the candidate profile, we typically review five to ten candidate ideas with our client to get their feedback and confirm we are in agreement. Sometimes adjustments are made after the client has the opportunity to see how the profile on paper materializes in viable candidates. The goal being to create a profile that is both on target and realistic. So, when clients commit to undertaking our candidate profile development process, it almost always leads to a more successful outcome.

As the leader of RSR’s Board Practice for almost two decades, I am proud of our track record in assisting a wide variety of clients – from start-ups and private companies to Fortune 50 corporations – in achieving their board recruiting objectives. We look forward to continuing to partner with existing and new clients and staying true to the principles that Russ established in the early days of our firm:

We continue to be a small firm with big results.

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Carter Burgess is head of the firm’s Board Recruiting practice and a senior member of the Board & CEO Services team. As practice leader, he focuses on director searches, the build-out of entire boards, comprehensive board composition analyses, multi-year succession planning strategies, and board performance assessments for companies in a broad array of industries.

RSR Partners is a boutique professional services firm headquartered in Greenwich, CT, that specializes in helping Boards and CEOs with their most critical recruiting, selection, and succession needs. The firm was founded in 1994 by industry icon Russell S. Reynolds, Jr. The firm has conducted thousands of projects for Boards and CEOs at public, private equity-backed, and family-owned businesses across a range of industries including asset management, consumer goods and services, industrial, technology, and healthcare.

Boardroom Trends & Outlook for 2024

Dear Clients and Friends,

As we reflect on 2023 and consider the possibilities for 2024, our Board Practice extends our heartfelt gratitude for your ongoing trust and support. It has been a dynamic and transformative year for the corporate landscape, and we are delighted to have navigated it alongside you. Leadership in the boardroom and C-Suite is simply indispensable.

In 2023 we initiated the Russell S. Reynolds, Jr. Chairman of the Year Award. The Chair of the Year Award was established to celebrate the legacy of one of the search industry’s greatest leaders and icons, Russ Reynolds, who has spent more than 50 years advising boards and CEOs on leadership. The award recognizes a Chair who successfully led a public company Board of Directors through significant business or governance challenges. As featured in Fortune magazine, the inaugural award was presented to Sarah Nash, Chair of Bath & Body Works, at our annual Directors Dinner in New York in October. Sarah demonstrated remarkable leadership juggling a spin-out of Victoria’s Secret, managing a CEO succession, handling activists as well as other business challenges all seemingly simultaneously. We were delighted to recognize her extraordinary governance and business guidance. We hope that many of you will join us for next year’s Directors Dinner and Chair of the Year Award.

Throughout 2023, the RSR Board Practice continued to act as the heart of our firm, not only assisting a wide range of clients with their critical governance related needs, but also informing and distinguishing our executive recruiting efforts. As we reflect on the coming year, we have several thoughts on governance issues that we expect to be at top of mind in boardrooms in 2024:

We look forward to continuing to assist our clients with their most important, complex, and sensitive leadership and governance concerns in 2024. We believe that RSR Partners is uniquely situated in the industry to provide unparalleled access to and insight into top-performing business leaders. In addition to our board recruiting capabilities, we offer our clients a broad set of other Board and CEO services. Should you have any important board or C-Suite leadership needs in the coming year, we would be delighted to share our insight and expertise to help you. More importantly, we look forward to our continued friendship with you all. 

Boardroom Imperative: The Search for More Board Leaders

‘Tis the season for public companies to approach prospective director candidates about joining their boards at next year’s annual meetings. Over the past several years, companies have done a good job at identifying what board member capabilities they need to address the challenges they foresee ahead. The constructive tension and pressure from stakeholder capitalism has made sure boards prioritize diversifying their composition and expertise. But like sports teams that try to build a team around a collection of star talent, boards are only as strong as their culture.

From our 30 years of working with Fortune 10 to pre-IPO boards, their effectiveness is predicated on how—and how well—their board leaders lead. The best can harness the individual talents of their fellow directors to create the necessary decision-making aperture and constructive tension that allows for the best possible decisions.  While admittedly there are individuals who have the unique and innate ability to lead other leaders, many of the most impactful board and committee chairs have developed their approach through hard work, agility, accessibility, courage, humility, and integrity.

As corporate boards continue to evaluate and add new directors, it is important for nominating committees to prioritize how candidates learn, adapt, and overcome as much as focusing on their past accomplishments. From our recent survey of public company directors, we highlight the best practices of great board leaders. We hope this will serve as a guidepost to build and enhance your own boardroom culture.

1. Establishing a Culture of Trust and Embracing Diversity of Viewpoints: The most impactful and revered board members can foster a board culture where trust and constructive discourse are paramount. This involves creating an environment where diverse opinions are valued and where challenging discussions can occur without fear of retribution. It’s about harnessing the collective wisdom of the board to make the best decisions possible. In today’s globalized business environment, embracing diversity of thought is not just a moral imperative but a strategic one.

2. Engaging Deeply in Strategy and Providing an ‘Outside View’: Successful boards are deeply engaged in various aspects such as strategy, digital integration, M&A, risk management, talent development, IT, and marketing. They contribute significantly by providing an ‘outside view’ to strategy and challenging the strategic alternatives presented by management. This requires directors to offer guidance and constructive feedback, ensuring that the company’s strategic direction benefits from diverse perspectives.  This is only possible if board members are avid and continuous learners who can connect the lessons of the past with the current trends and issues facing companies today. 

3. Objectivity and Big-Picture Mindset: A director must be objective and possess a big-picture mindset. It’s essential for board members to be future-ready and have the courage and decisiveness to make high-quality decisions on pressing strategic issues. A great director steers the board’s attention to these critical strategic issues and potential risks, balancing short-term and long-term perspectives.

The role of a director as a leader on the board is multi-dimensional and requires a blend of strategic insight, objective decision-making, courage, and the ability to foster a culture of trust and inclusivity. By embodying these qualities, directors can significantly contribute to the success and resilience of their organizations, steering them towards a sustainable and prosperous future. Boards looking to enhance their effectiveness would do well to cultivate these traits or prioritize them during the selection process, ensuring their directors are equipped to navigate the complex and ever-changing landscape of our business world.

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Brett Stephens is the CEO of RSR Partners and helps lead the firm’s Board & CEO Services

RSR Partners is a boutique professional services firm headquartered in Greenwich, CT, that specializes in helping Boards and CEOs with their most critical recruiting, selection, and succession needs. The firm was founded in 1993 by industry icon Russell S. Reynolds, Jr. The firm has conducted thousands of projects for Boards and CEOs at public, private equity-backed, and family-owned businesses across a range of industries including asset management, consumer goods and services, industrial, technology, and healthcare. To learn more about RSR Partners, click here.

Chief Supply Chain Officer Imperative: Anticipate and Plan for Disruption

Whether you call the role Chief Supply Chain Officer (CSCO), Chief Operations Officer (COO), or some variation, someone needs to be responsible for leading all extended supply chain processes for any enterprise producing physical goods. Moreover, this person must be a full strategic partner with the CEO, CFO, and other members of the C-suite. They are responsible for the lion’s share of enterprise cost and capital spending. Historically, many organizations failed to recognize the need for a “strategic-minded” CSCO.

For the last several decades, manufacturing businesses and their supply chain leaders focused relentlessly on driving cost out of the system. This led to a massive shift in manufacturing and sourcing to lower cost regions, particularly China, in pursuit of lower production cost. It also led to consolidating vendor bases, including increased sole sourcing, in return for lower prices from suppliers and just-in-time production which drove down inventory investment requirements.

This drive for lower cost worked well when conditions were relatively stable. Customers received lower prices, shareholders owned a more profitable business with higher returns for their investment, and employees worked in a growing business with more career opportunities. What was not well recognized was the added risk the enterprise assumed. Sourcing and manufacturing in Asia lengthened supply chains and made them more vulnerable to transportation disruptions. Consolidating vendors increased exposure to supplier outages. Reliance on China increased political risk. Just-in-time manufacturing eliminated inventory which could serve as a buffer to absorb mismatches between supply and demand. Occasional disruptions in one or another of these dimensions occurred and companies scrambled to address them. Few had risk mitigation plans in place ready to deploy, and most were treated as one-off events. Then the covid pandemic hit, which clearly exposed the inherent risks companies had assumed in adopting the low-cost supply chain strategies of the last 40 years. While the drive to low cost was a “strategy” many pursued, companies did not think strategically about the potential unintended consequences.

Companies should not think of the pandemic as a once-in-a-century event and revert to business as usual. Disruptions have been, and will continue to be, a fact of life for manufacturers. The McKinsey Global Institute has studied the history of supply chain disruptions and their effect on business results. They estimate companies lose 45% of one year’s EBITDA to supply chain disruptions over the course of a decade. Historically, corporate responses to supply chain disruptions have been reactive. Recent disruptions have clearly illuminated the imperative for creating and maintaining operational resilience. What does this mean for the next generation of CSCOs?

Apart from the leadership and strategic skills required of any C-suite executive, perhaps the most important skill required of today’s CSCO is that of an underwriter. Underwriters, be they insurance, investment banking, commercial banking, or other, evaluate the risk involved in a particular activity, asset, or person and set a “price” appropriate to the risk. As we saw during the pandemic and its aftermath, most CSCOs failed as underwriters. They did not appreciate the risks they were bearing and had not taken necessary steps to “insure” against those risks. As a result, supply chains broke for extended periods—inventory did not arrive when needed, factories closed, customers did not receive their orders, and consumers saw bare shelves and empty lots.

As we have seen over the last three or four years, most companies were unprepared for pandemic risk, geopolitical risk, weather risk, et cetera, much less having the compounding effects of these risk occurring simultaneously. Insurance underwriters tend to think of risk along two dimensions: frequency (how often a loss is likely to occur) and severity (how expensive a loss is likely to be). Low frequency, high severity risks are the most difficult to predict and insure. To protect against these catastrophic events, insurers often purchase catastrophe coverage to protect themselves from existential losses. Manufacturers had not understood the extent of their exposure to “catastrophes.” Consequently, they did not have risk mitigation measures (insurance) in place and suffered greatly for it as suppliers in global markets shut down and transportation infrastructure became clogged.

To mitigate these very real but previously poorly perceived risks, many are now rethinking their global supply chain strategies with an emphasis on creating supply chain resilience. This has included reshoring and near shoring critical manufacturing infrastructure; deploying digital supply chain solutions to speed information flow and decision making; diversifying sourcing partnerships; and investing in critical inventory. Manufacturers are now actively assessing the broad range of integrated supply chain risks they face, quantifying the exposure they have to disruption, and making the necessary investments and other actions to mitigate these risks. This requires new skills on the part of the CSCO and full partnership in strategic decision making with the rest of the C-suite.

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Don McMurchy is a senior member of the Industrial Technology practice, driving execution across a broad range of senior leadership roles for clients ranging from start-ups to Fortune 50 enterprises. Based in Cleveland, his engagements are typically continental in scope with additional experience in Asia and Europe.

RSR Partners is a boutique professional services firm headquartered in Greenwich, CT, that specializes in helping Boards and CEOs with their most critical recruiting, selection, and succession needs. The firm was founded in 1994 by industry icon, Russell S. Reynolds, Jr. The firm has conducted thousands of projects for Boards and CEOs at public, private equity backed, and family-owned businesses across a range of industries including asset management, consumer goods and services, industrial, technology, and healthcare. To learn more about RSR Partners, click here.

Sarah E. Nash Receives Inaugural Russell S. Reynolds, Jr. Chair of the Year Award

Greenwich, Conn., October 26, 2023 RSR Partners, a leading board and executive search firm, presented the inaugural Russell S. Reynolds, Jr. Chair of the Year Award to Sarah E. Nash, Chair of the board of Bath & Body Works. The award was presented to Sarah at the firm’s annual Directors Dinner in New York City on October 25, 2023.

The Chair of the Year Award was established to celebrate the legacy of one of the search industry’s greatest leaders and icons, Russ Reynolds, who has spent more than 50 years advising boards and CEOs on leadership. The award recognizes a Chair who successfully led a public company Board of Directors through significant business or governance challenges. The winner of this year’s award was chosen from more than 30 nominations by an independent selection committee comprised of renowned experts in their fields, including Mikaela Boyd, Nik Deogun, Ed Kangas, Kim Lew, Christie Smith, and Brett Stephens.

“Sarah led the Bath & Body Works board through an incredible governance and business transformation,” said Kim Lew, a member of the selection committee. “Her accomplishments include leading the spin-off of Victoria’s Secret; collaborating with the nominating and governance committee on the recruitment of exceptional and highly diverse talent to the board of Bath & Body Works and the new board of Victoria’s Secret; navigating a successful CEO transition and selection process; and building a constructive path forward after an activist campaign. The leadership and integrity exhibited by Sarah is an example of how important board leadership is during times of turbulence. She is very worthy of this award.”

“This award recognizes Sarah’s extraordinary leadership, dedication and service to Bath & Body Works over the past few years,” said Steve Steinour, Chair of the Bath & Body Works Audit Committee. “Sarah served as Bath & Body Works’ Interim CEO with very short notice, where she played a pivotal role in the company’s transformation with its spin-off of Victoria’s Secret. During her tenure, Sarah has exemplified strong business acumen including leading a successful shareholder derivative settlement and navigating a complex supply chain reset with partners. She has exemplary people management skills such as overseeing multiple chief executive officer transitions, recruitment efforts for eight board members, and leading the company during the onset of COVID. We are grateful for her contributions and leadership since her assumption of the role of chair in May 2020.”   

“I’m incredibly proud of my fellow directors and the leadership team at Bath & Body Works,” stated Sarah. “They have shown irrefutable dedication to the vision we all share for this company. Their input and support throughout this past year was invaluable, and we have much to look forward to. I am also grateful to be recognized by an award that pays tribute to Russ, his legacy, and his impact on how board leadership is viewed and valued.”

“Sarah’s terrific,” commented Russ. “She possesses the characteristics of a great leader. She is objective, open to advice, decisive, and a good communicator. She operates with integrity and puts the company’s and others’ needs ahead of her own. I also started my career at JP Morgan, so I was particularly thrilled to see we share a fondness for finance and banking. I look forward to seeing how Sarah develops as a board leader and continuing to celebrate her achievements.”

About Russell S. Reynolds, Jr.

Russell S. Reynolds, Jr. (“Russ”) is an American business executive, author, and founder of two of the search industry’s most prominent firms. Considered one of the pioneers of the executive search and board recruiting profession, Russ has counseled the boards and CEOs of many of the world’s leading companies over the past 50 years. In 1969, he founded Russell Reynolds Associates, which soon became one of the world’s foremost international executive recruiting firms. Russ sold his interest in the firm in 1993. In 1994, Russ founded the Directorship Group, later named RSR Partners, where he served as Founder and Chairman until 2022.

About Sarah E. Nash

Sarah E. Nash has served as Chair of the board of Bath & Body Works, Inc. since January 28, 2023. She served as Executive Chair of Bath & Body Works, Inc. from February 2022 to January 2023 and as the Interim Chief Executive Officer from May to November 2022. Prior to being appointed Executive Chair, she served as Chair of the board between May 2020 and February 2022 after having joined the board as an independent director in May 2019. Sarah is also Chief Executive Officer and owner of privately held Novagard Solutions, an innovator and manufacturer of silicone sealants and coatings and hybrid and foam solutions for the Building Systems, Electronics, EV and Battery and Industrial and Transportation markets.

Sarah spent nearly 30 years in investment banking at JPMorgan Chase & Co. (and predecessor companies), a financial services firm, retiring as Vice Chairman of Global Investment Banking in July 2005. She served on the board of directors of Knoll, Inc., a designer and manufacturer of lifestyle and workplace furnishing, textiles and fine leathers, from 2006 through its acquisition by Herman Miller, Inc. in 2021 and privately held Irving Oil Company through March 2022.

Sarah currently serves on the boards of directors of Blackbaud, Inc., a software company providing technology solutions for the not-for-profit industry, and privately held HBD Industries, Inc., a manufacturer and supplier of general purpose and application-engineered industrial products. Sarah is Trustee of the New York-Presbyterian Hospital, a member of the Smithsonian Tropical Research Institute (STRI), Panama and the Chair of the International Advisory Board of the Montreal Museum of Fine Arts. She also served as a member of the National Board of the Smithsonian Institution through 2022. Sarah holds a BA in political science from Vassar College.

About the Chair of the Year Award

RSR Partners announced the establishment of the Russell S. Reynolds, Jr. Chair of the Year Award in October of 2022. The award will annually recognize the Chair of a public company’s Board of Directors that has successfully led the board through significant business or governance challenges. The award celebrates the legacy of Russell S. Reynolds, Jr. (“Russ”), who has spent more than 50 years advising boards and CEOs on leadership and governance.

To be eligible for the award, a nominee must serve as a Chair of a board of directors at a U.S. public company with revenue or market cap greater than $1 billion. The nomination period takes place from August through September. The winner of the award will be chosen by an independent committee comprised of renowned experts in the areas of strategy, finance, strategic communications, shareholder activism defense, investment management, human capital consulting, and corporate governance. This year’s committee included:

More information about the award can be found at: www.chairoftheyearaward.com.

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Contacts
Lindsay Griesmeyer
+1 (203) 618-7076
media@rsrpartners.com             

RSR Partners Establishes Chair of the Year Award

Annual Award Named After Russell S. Reynolds, Jr.

Greenwich, CT, June 8, 2023 RSR Partners, a leading board and executive search firm, announced today that it has established the Russell S. Reynolds, Jr. Chair of the Year Award. The award will annually recognize the Chair of a public company’s Board of Directors that has successfully led the board through significant business or governance challenges. The award celebrates the legacy of Russell S. Reynolds, Jr. (“Russ”), who has spent more than 50 years advising boards and CEOs on leadership and governance.

“I am honored that this award will become an annual way of recognizing exceptional board leadership,” said Russ. “The real trick in selecting great board leaders is not only focusing on their experience and specific skill sets, but on whether they have the foresight, curiosity, character, and courage to lead.”

The winner of the award will be chosen by an independent committee comprised of renowned experts in the areas of strategy, finance, strategic communications, shareholder activism defense, investment management, human capital consulting, and corporate governance. The committee includes:

“Russ has observed how highly effective boards and CEOs operate during their most seminal moments,” stated Brett Stephens, Chief Executive Officer of RSR Partners. “There is no better way to honor Russ’ innate talent for identifying and evaluating leaders than with an award in his name that recognizes the incredible impact a Chair can have on an organization’s leadership and long-term success.”

Public company directors will be invited to submit their recommendations beginning June 8th. Any Chair of a board of directors at a U.S. public company with revenue or market cap greater than $1 billion may be nominated. The award winner will have successfully led the board and executive team through a significant business or corporate governance challenge. The inaugural winner will be announced in October at RSR Partners’ Annual Directors Dinner in New York City. Information about the award can be found at: www.chairoftheyearaward.com.

About Russell S. Reynolds, Jr.

Russell S. Reynolds, Jr. (“Russ”) is an American business executive, author, and founder of two of the search industry’s most prominent firms. Considered one of the pioneers of today’s executive search and board recruiting profession, Russ has counseled the boards and CEOs of many of the world’s leading companies over the past 50 years. In 1969, he founded Russell Reynolds Associates, which soon became one of the world’s leading international executive recruiting firms. Russ sold his interest in the firm in 1993. In 1994, Russ founded the Directorship Group (later named RSR Partners) where he served as Founder and Chairman until 2022.

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Contacts
Lindsay Griesmeyer
+1 (203) 618-7076
media@rsrpartners.com   

The Evolving Boardroom: Finding the Right Diverse Candidates

A continual challenge we have helped our clients address over the years is how best to populate boards with diverse directors. In fact, 86% of all of our board placements over the past two years have either been gender or ethnically diverse. Data shows that diverse boards with the right combination of relevant skills and experience outperform more homogenous ones. As such, boards often overlay their diversity objectives on top of the more traditional objectives, such as requiring that the director possess the relevant skills, experiences, perspectives, and judgment needed to be successful. Achieving all these objectives simultaneously can often prove difficult and is a short-term solution that, if not managed correctly, can have a devasting impact on board performance in the long-term. Instead, identifying and cultivating relationships with potential candidates that may not be ready to join a board in the immediate term, but have the potential to serve in several years, can increase a board’s ability to achieve these objectives, ensure culture, and remain viable for many years to come. Yet, it requires discipline and a commitment to a strategic, long-term vision.

Varying Viewpoints on Diversity

As a starting place, it is helpful for directors to ascertain what they should take into account when considering how to add diversity to their ranks. A common request from boards is to find the “best candidate,” which often means the candidate that checks all the boxes at the same time – diversity and the specific skills and experiences needed – even if there is a paucity of that candidate type in their target companies and industries. Boards can broaden their definition of diversity by considering and understanding the culture and effectiveness of the current board. In addition, diversity should also reflect the board’s customers, employees, and communities. Best practice is for boards to consider what the “best candidate” is right now and also give significant thought to what the “best candidate” is in the future – for the board and the organization. Perhaps one of the criteria that seems critical right now can be postponed until another board seat becomes available. Lastly, some directors harbor concerns that they won’t have a place under a more DEI-focused paradigm, especially those with socially advantaged identities. This can create additional hurdles, however, exploring the data that demonstrates that diversity of identity leads to diversity of thought, and in turn leads to productive discussions and better outcomes, can help expand viewpoints on the importance of diversity in the boardroom.

Board Diversity and Results

According to ISS, there has been continued improvement in racial and ethnic board diversity. Approximately 86% of Russell 3000 Index companies, excluding the S&P 500, and 99% of S&P 500 companies have at least one racially/ethnically diverse board member. Additionally, nearly all industry sectors showed increased racial/ethnic board diversity year-over-year.

A new study from KPMG specifically referencing African Americans (AA) on boards states while they are still underrepresented in the boardrooms of public Fortune 1000 companies, there has been a significant increase in the proportion of these companies with at least one AA in the boardroom. Just over three-quarters (76%) of the companies studied had at least one AA director as of September 2022, compared to only 61% in 2020. However, it is still uncommon for public F1000 companies to have multiple AA directors; less than a quarter (22%) of these companies had more than one AA serving on their board. Larger companies are likely to have more AA directors than smaller companies. For the first time, all of the largest US public companies on the F100 list have at least one AA director. In fact, nearly one in ten (9%) of these companies have three or more AA on the board.

Age diversity is another factor to consider. In 2021, BoardReady released a report showing companies whose median director age was 55 or less had 10.1% YoY revenue growth compared to companies whose median director age was 65 or more which had -7.7% YoY revenue growth. That same report showed companies with over 30% of board seats held by women outperformed their less gender-diverse counterparts in 11 out of the top 15 S&P500 sectors. In addition, companies should look at geographic diversity as well as global experience.

2023 Diversity Voting Policies

ISS and Glass Lewis will generally recommend a vote against the nominating committee chair unless the following guidelines are met:

Universal Proxy Card

With the UPC, shareholders will have a greater say on the board’s composition as they can more readily compare the board’s nominees with the activist slate and focus on existing director performance, skills, experience, and diversity gaps. See this link to an RSR article on the UPC.

Succession Planning Process

There are multiple ways to address a lack of diversity in the boardroom, but all of them require continuous attention – a board should not stop seeking diversity once they have achieved their immediate “target.” Ideally, boards should seek to surpass the minimum requirement and help set the stage for the future, both within their own organization and to be a leader in the industry. Some possible approaches to improve boardroom diversity include:

How RSR Can Help with Director Searches

Our Board and CEO Services team partners with CEOs and boards to understand issues, assess opportunities, and strategically advise to ensure sustainable growth strategies are optimized. We continue to complete diversity assignments for a wide variety of companies, from small private family companies to Fortune 500s. Again, in 2021 and 2022, 86% of our board placements were either gender and/or ethnically diverse. We are proud to play a role in this important imperative, and excited for our clients who are making progress in diversity.

Our team leverages RSR Partners’ renowned experience in corporate governance with our industry and human capital consulting expertise to locate the best candidates. RSR Partners can assist your board with:

We would love to hear your perspective on the evolution of board diversity and assist you in achieving your board’s diversity goals. 

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Greg Lau leads RSR’s Board Advisory practice, Carter Burgess leads the Board Recruiting practice, and Eric Douglas Keene is a Managing Director in the firm’s Board & CEO Services practice at RSR Partners.

RSR Partners is a boutique professional services firm headquartered in Greenwich, CT, that specializes in helping Boards and CEOs with their most critical recruiting, selection, and succession needs. The firm was founded in 1994 by industry icon, Russell S. Reynolds, Jr. The firm has conducted thousands of projects for Boards and CEOs at public, private equity backed, and family-owned businesses across a range of industries including asset management, consumer goods and services, industrial, technology, and healthcare. To learn more about RSR Partners, click here.

The Rise of the Independent Chair

This article was originally published on LinkedIn here.

Over the past 30 years of working closely with public company boards and CEOs, we’ve had a front row seat on the debate of whether to keep the Chair and CEO roles separate or combine them. While shareholder proposals advocating the split are common (especially when CEO transition, underperformance, misalignment, or crisis occurs), US public companies have been allowed some freedom to choose what board leadership model works best for them. However, since 2020, we have seen a subtle but meaningful change in the power and influence of the Independent Chair that is different than the past several governance cycles.

The role of a public company CEO has become increasingly complex as societal issues now fall on management’s doorstep. In many cases, the role and responsibilities of the Independent Chair has increased to help the CEO and the board to confront the range of stakeholder concerns. However, much is predicated on the chemistry and dynamic between the CEO and Chair and whether this change is a positive and productive shift. Countless articles have been written about what makes an effective Independent Chair. But at the end of the day, the formal and nuanced definition of the Chair and CEO roles and relationship between them is at the core of success and failure. 

It is not a stretch for the outside world to imagine that when a CEO is not able to also assume the role of Chair (as it is easier for them to control the agenda), they would want to have an outsized vote to help select who would become the new Chair. Depending upon how the board views the CEO, they will either amplify or minimize the CEOs voice on that decision. At the end of the day, all stakeholders should seek to have a dynamic whereby the Chair is an adviser, a coach and supporter of the CEO but also provides constructive tension and accountability that pushes the CEO and management team to deliver on their strategic plan. As a result, the Independent Chair needs strong situational awareness to understand when to use their influence vs. authority.  

When digging into recent governance data on the 1000 most valuable US public companies, some statistics caught our attention this week:

During the business reset and inflection the past few years, half of the Independent Chairman positions turned over at the 1000 most valuable US public companies. As we saw firsthand with many of our clients, most of these boards had more than one potential Director who could serve as the new Chair. During previous cycles, it seemed more politically obvious who was the right person for the role. What has materially changed today is the amount of time and deliberation it takes to pick who should be Chair and the impact it will have on the CEO and its various stakeholders. ISS and Glass Lewis have recognized the value and new work requirements of the Independent Chair by counting it as 2 outside boards instead of 1 when considering over boarding. While I have more than a few differences of opinion with the proxy advisors. In this case, I feel they appropriately value their importance and responsibilities. 

The impact a great Independent Chair has on the board, management, and the company is not entirely visible or understood by the viewing public. But during a company’s most challenging and seminal moments, you will get peek behind the curtain.

We anticipate in the coming months helping shine a brighter spotlight on those Independent Chairs who have helped their companies get one step closer to their aspirational goals. In the meantime, please don’t hesitate to reach out to our team if you want to share or acknowledge the impact your Chair has had on your organization. 

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Brett Stephens is the CEO of RSR Partners and helps lead Board & CEO Services at RSR Partners

RSR Partners is a boutique professional services firm headquartered in Greenwich, CT, that specializes in helping Boards and CEOs with their most critical recruiting, selection, and succession needs. The firm was founded in 1994 by industry icon, Russell S. Reynolds, Jr. The firm has conducted thousands of projects for Boards and CEOs at public, private equity backed, and family-owned businesses across a range of industries including asset management, consumer goods and services, industrial, technology, and healthcare. To learn more about RSR Partners, click here.