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

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 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.

RSR Partners Strengthens Capabilities with Kimberly Melcer

Greenwich, CT, March 1, 2023RSR Partners, a leading board recruiting and executive search firm, announced today that Kimberly Melcer has joined the firm to lead their Marketing & Digital practice. Kimberly specializes in identifying leaders with digital transformation capabilities across the C-Suite, and especially within the marketing function. She works with start-ups, privately held, and public organizations. She has extensive experience within the AdTech, MarTech, and broader consumer and marketing services industries.

Prior to joining RSR, Kimberly helped lead the Digital practice at Buffkin / Baker. She transitioned to executive recruiting following a marketing and merchandising career in the fashion industry, most recently serving as Vice President of Global Merchandising at Armani Exchange. She started her career in the Macy’s Buying Program and later led the marketing and merchandising team within the non-beauty business at Avon.

“Ability to drive technological and digital transformation is increasingly a skill our clients are looking for on their boards and their leadership teams,” stated Brett Stephens, Chief Executive Officer of RSR. “Kimberly’s experience deepens and enhances our ability to access the talent our clients need to be at the forefront of innovation. Kimberly is a fantastic addition to our team as we continue to build service offerings that complement our existing strengths and add value for our clients.”

“There are incredible opportunities for leaders who operate at the convergence of data, technology, and marketing,” said Kimberly, “and the MarTech and AdTech landscape continues to evolve and grow. I was attracted to RSR’s collaborative culture and entrepreneurial spirit, especially since this area of expertise is welcomed across the firm and interconnects with other C-Suite functions. I’m excited to be a part of the firm’s future and its continued success.”   

About 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 1993 by industry icon and Chairman Emeritus, Russell S. Reynolds, Jr. Over the past 30 years, the firm has conducted thousands of projects for Boards and CEOs at public, private equity owned, and family-owned businesses across a range of industries including consumer goods and services, financial services, healthcare, industrial, and technology. To learn more about RSR Partners, click here.

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