« Boards Are Touting International Directors Amid Global Upheaval »

« These directors can also offer a boost to the bottom line, new research shows »

« For the first time since at least 2018, more than half of S&P 500 boards say they have members with international experience, according to data from ESGauge. As companies face geopolitical crises, increased globalization and foreign competition, boards are recruiting directors — or at least touting the ones they already have — who can help oversee these risks, sources said.

These directors can also offer a boost to the bottom line, new research shows. Board members who are from or have worked abroad for a period of time and work cohesively with their fellow directors help companies’ financial performance, according to a study out of Binghamton University.

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International experience is valuable as companies are facing a host of global risks and opportunities, sources said. Indeed, geopolitical instability was ranked the top issue that CEOs expect to influence or disrupt business strategy within the next year, according to 60% of 80 CEOs surveyed by Deloitte this summer. And 67% of 100 CEOs surveyed by KPMG earlier this year said they are undergoing « significant » strategic changes in response to geopolitical uncertainty, including wars, conflicts and elections happening around the world.

« When you talk about global experience … you need to trust somebody with a broader view that understands not only the international business perspective but would understand the political tension of the region and more broadly the political environment there, » said Guylaine Saucier, board chair at the Institute for Governance of Private and Public Organizations and a director on several private and public boards in Canada and France.

[…]

Meanwhile, roughly one-third of S&P 500 directors are non-U.S. nationals, down slightly from 35.3% last year, according to ESGauge. Companies should not take their eyes off directors from international backgrounds, Saucier said.

« You have to have somebody who understands intimately the culture of the country in which you are working, » Saucier said. « It’s essential because that’s where you’ll have really the best input, the most value from this board member. »

After recruiting such directors, it’s important to « take the time to ensure that even if [a director is] coming from a different culture, they will be able to work collegially with your board, » Saucier said. This may mean explaining cultural nuances or traditions here in the U.S and being respectful of theirs, sources said. »

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