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 Management, Consumer, 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:
- Alignment of culture, a learning mindset, and diversity of opinions are now more important than ever on boards and C-Suite teams. The world has changed and what worked in the past will not work in the future. It is therefore critical to perform a robust and comprehensive competencies gap analysis at the board level and across key functional leaders. Does the board and the company foster an environment of intellectual curiosity, and an open and constructive dialogue without limiting different viewpoints or alienating members? Having the right culture is the foundational element for high performance.
- Risk governance requires board and executive leaders to focus not only on current and urgent risks, but to also more carefully consider low probability or unknown risks that may have enormous impact on the business. There have been many “black swan” events emerging, and as a result, creative scenario planning is required. Our recent thought piece, The Chief Supply Chain Officer Imperative: Anticipate and Plan for Disruption, discusses the need to develop operational resilience. It also might be worth establishing a committee or an advisory committee to focus on geopolitical risks.
- Don’t be left behind on AI. The NACD recently reported on the acceleration of science, technology, and/or innovation committees formed at the board level, noting that 67 Fortune 500 companies now have one or more of these committees. Does your board and leadership team have the skillset to understand generative AI, emerging/disruptive technologies, and cyber risk? Or do you need to recruit the right talent to help meet these challenges?
- The Universal Proxy Card will now be used in proxy contests to target the performance of individual directors. Activism is also expected to increase in 2024. It is important to establish action plans and accountability. Evaluations can help boards plan for succession and recruit to fill gaps in skills and experience.
- A new risk has emerged – 74% of executives surveyed by Mercer (Global Talent Trends report) stated that the majority of their workforce cannot adapt to the new world of work. People are key to competitive advantage and value creation – it is critical to know in what environments employees are productive and feel appreciated. Human capital management can play a critical role at an organization, especially in light of the new SEC disclosure rules coming in 2024.
- Lastly, board and leadership burnout is real. Time demands and pressure on directors and corporate leaders have increased substantially. Our recent thought piece, The Divergent Voice: A CEO Formula for the Current Fog of Business, discusses the complexities of being a business leader in today’s environment.
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.