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Asians
sought for US, Europe boardrooms
Being tech-savvy a bonus; diversified
board seen improving ability to predict future trends
Asians, especially those who are tech
savvy: You're wanted to sit on the boards of US and European companies.
The demand for Asians reflects the fact
that Asian markets are the fastest growing, with many more of them being
early adopters of technology than others, a survey by headhunter Christian
& Timbers found.
'There is increasing demand for Asian
board members to sit on clients' boards,' said Kathryn Yap, Christian &
Timbers Asia-Pacific managing partner and head of its TMT (technology, media
and telecoms) practice.
'US and European companies are now
looking at their boards and realise they (at present) only have Westerners,'
said Ms Yap in a recent interview.
 
The survey also found that the average
age of a board member is 57, with the majority male. One notable exception
is AT&T. It has six women out of 17 board members and that is unique,
said Ms Yap.
On US boards, international members
usually meant British, whereas the majority of those on European boards were
Americans.
Previously managing director of Russell
Reynolds Associates here, Ms Yap was recruited to set up Christian &
Timbers's first Singapore/Asian office to look for more Asian board members,
as well as very senior managers.
'One of the reasons why we have decided
to expand into Asia-Pacific is increased demand and request for Asian board
members to be sitting on our clients' boards,' she said.
In many companies, less than 25 per cent
of their board members are TMT or convergence savvy, which places them at a
distance from the consumers they are trying to reach.
'Take SPH (hypothetically) which is
really a print media company, if your board for example does not understand
convergence and is not close to consumers, they may not realise there are
crazy people like your sons and my daughters who are getting their news
through their blackberries and handphones . . . I still want to read
newspapers because I want the texture of it . . . we just assume they are
like us,' said Ms Yap.
Convergence seems to be a topic in
boardroom discussions now, regardless of what industry one is in, she said.
Convergence is not about one thing
overtaking another, rather how over time, technology can change industries
and businesses. Consider: when trains came on the scene, horse carriages did
not disappear at once; then cars arrived, and they didn't replace trains;
and now, planes have yet to make cars or trains redundant.
But over time, businesses are transformed
and having a diversified board could improve the ability to predict future
trends.
Besides wanting Asians and women on
board, the search is to look beyond CEOs, she said. 'Once upon a time, it
used to be all ex-CEOs, friends of friends of friends . . . you have wine
probably and talk a little bit about the business.
'You will all be saying the same things,
there's no real debate and stimulation that can stretch the business goals
the company can actually achieve.'
Companies are looking for individuals who
'spark imagination', such as the chief marketing officer who understands
human psychology. They could also consider top human resource professionals
who are trained to get the best out of a team.
She cited Bono, lead singer of U2 and a
vocal champion of a fair deal for the world's poor who sits on a private
equity firm board, giving the company a different pair of eyes to drive its
business. Are there Asians who meet the criteria? Ms Yap said that the
Asia-Pacific talent pool is good. And pay isn't too bad. One company pays
its board members 60,000 (S$178,000) a year for attending 4-6 meetings.
- by Siow Li Sen SINGAPORE
BUSINESS TIMES 19 March 2007
Firms must be willing to pay for
directors' talent
Board directors
with the required skills and having more independence are crucial to raise
the level of corporate governance in Singapore. But companies must be
willing to pay more to attract the right talent.
Brian Pitman, an independent director of
Singapore Airlines and former chairman and CEO of London-based banking group
Lloyds TSB, told BT this yesterday in an interview.
He stressed the importance of the
nomination committee in choosing directors with the right talent and skill
sets, as well as the need for proper induction of new directors for them to
understand the company's business better.
'Boards do have to dig well below the
surface to know what's going on in the companies, to understand the culture
and dynamics of the company and what makes them tick,' Sir Brian said. He
also delivered his keynote speech on this topic last night at PWC Forum
2008.
Given the small talent pool here,
Singapore companies often face problems trying to fill up vacancies on the
board and end up choosing candidates that the management is familiar with.
This has raised questions over the
independence of the board. Sir Brian said it could be perceived that given
the board's relationship with management, the former may be tempted to sign
off financial statements that look good on the surface without questioning
or challenging them.
He believes Singapore can draw lessons
from the UK, such as engaging search agents or headhunters to seek out
potential candidates for its board and engage in a formal selection of
directors.
'If you want to get real independence,
you need to find a way to get a list of people who have no connections with
the present directors,' he said.
These views resonate with a study by
Associate Professor Mak Yuen Teen of the National University of Singapore
last year, which raised the question of how independent directors really
are. There was concern over controlling shareholders driving decisions such
as the appointment of independent directors.
Sir Brian said Singapore companies should
consider raising the proportion of independent directors from at least a
third of the board to at least two-thirds, as in the UK.
'If you want to attract the right talent,
you also need to be willing to pay for it,' he added. A director of a
Singapore company generally earns between $40,000 and $60,000 despite recent
adjustments, compared with about £pounds;70,000 in the UK.
Singapore could also consider the UK's
practice of having an external evaluation by consultants who advise the
board on how to improve and assess the performance of the chairman, he said.
Keith Stephenson, PWC Asia Pacific
performance improvement leader, stressed the importance of training for
directors. To this end, PWC has been providing training sessions for
non-executive directors here and there has been more enquiries on such
courses here. The regulators here have also responded in this area by
setting up a committee to guide companies' audit committees.
Mr Stephenson told BT that in his
experience with companies here, the issues facing them often centre around
understanding the internal controls framework and recognising when there is
a non-compliance.
And even after a good framework of
corporate governance sets in, it is a challenge for these companies to bring
this set of good practices with them as they extend their businesses abroad.
Another problem is also surfacing as
companies enter into more sophisticated financial instruments. Their
directors are not equipped to know whether the companies are speculating or
hedging, Mr Stephenson added.
'More education and training for
directors, totally specific to them on practical training on Singapore, can
only be beneficial.' - 2008
August 20 BUSINESS
TIMES
Surprise! Women on the Board Earn More
There's a new gender gap in the
boardrooms of Big Business. And it's not the one you think. A new survey on
corporate board pay has found that the median compensation for female
directors is actually higher than that for male directors.
In its annual director pay survey, The Corporate Library, a corporate
governance and executive compensation research group, reports the median
earnings for female corporate directors is $120,000. That's about $15,000
higher than the median total compensation for male directors, which is
$104,375. "I was so surprised by the statistic," says Paul
Hodgson, senior research associate for The Corporate Library, who authored
the study, which looked at the pay of more than 25,000 directors at more
than 3,200 companies.
Not that women's representation on boards is that exceptional. Some 91% of
S&P 500 companies have at least one woman, according to executive search
firm Spencer Stuart. [Apple (AAPL), Bear Stearns (BSC), and Countrywide
Financial (CFC) are currently among the women-free boards.] But just 15% of
boards have three or more female directors, even though the average board
has 11 members. While companies may be clamoring to inject diversity into
their director ranks, the reason for the difference in pay likely can't be
attributed to competition over qualified candidates, Hodgson says.
Generally, basic cash fees and stock grants are similar for a board's
members. "There's very little leeway given to bumping up compensation
for individual directors," Hodgson says. "You can't offer more to
a diversity candidate just because they're a diversity candidate."
Sarbox Effect Tails Off
What does differ are the fees paid to committee members -- the audit and
compensation committees pay the most -- and, of course, the pay for
committee chairs, independent lead directors, and chairmen. Hodgson
theorizes that boards, eager to get female representation across the board,
assign more women to multiple committees, earning them extra fees. He also
says the pay differential appears most among smaller companies, where good
governance practices, which include concerns about getting diverse input on
several committees, tend to be better.
Overall, the median total compensation for all directors rose 12% from the
year before to $100,031. [Due to a lack of gender data, the medians are
higher for both men and women because they were based on a slightly smaller
sample size.] That's a slowdown from last year, which saw a 20% rise in
director pay. Hodgson chalks up the slowing growth to a greater distance
from the "governance disasters" that prompted some of the
corporate scandals in the early part of the decade. That increased the
pressures on director accountability and responsibilities, driving up pay.
"Sarbanes-Oxley was back in 2002, so we've had a few years for that to
play out and solidify into more regular rates for directors," he says.
Some numbers, however, did increase dramatically this year. More than 80
directors made more than $1 million in total compensation for a single board
seat, up from just 18 identified last year. According to The Corporate
Library, the two most highly paid directors who were not chairmen or former
CEOs are Thomas Smach of footwear phenom Crocs (CROX) [$5,479,347] and John
Gillespie, a director at White Mountains Insurance Group (WTM) [$4,390,699].
Total compensation figures include cash fees, stock and option awards,
non-equity incentive compensation, any change in pension values and deferred
compensation plans, and "all other" compensation.
Year-Ago Comparison Tricky
While the number of directors with more than $1 million compensation for a
single board seat made a huge leap, Hodgson is careful about drawing
comparisons. New Securities & Exchange Commission disclosure rules
provided much more clarity on directors' total cash earnings and the value
of additional benefits. In the past, Hodgson and his team had to calculate
compensation, and so the actual number of $1 million-plus members may have
been higher last year than it had previously calculated. Some of the perks
directors receive -- free air travel for many airline directors, for
instance -- were disclosed in the past, but not assigned a value.
In addition, as executive turnover continues to climb, Hodgson guesses there
may be more former CEOs in the chairman role. Compensation left over from
the executive suite, such as stock grants that vest after leaving office,
could be impacting the number of highly paid directors. Nine of the 25 most
highly paid directors this year are also former CEOs.
Besides the surprising gender gap, The Corporate Library study produced a
few other intriguing findings. The median cash fee for directors was highest
in the food products industry, at $75,000, with the aerospace & defence,
petroleum products, and gambling industries not far behind.
And if you're planning to join a board, it pays to have a fancy title. The
median total compensation for judges, at $344,953, was the highest among
directors with titles. Knights get the next highest pay, at $164,636. And
the lowest title premium? It goes to medical doctors. At $105,181, their
median total compensation isn't far from the overall median.
- 2007 November 9 YAHOO!
Women directors on UK boards still
rare
Seven out of 10 of Britain's top 350 companies
have made boardroom changes in the past year - but the number of women
making it to director level has not risen, reports The Guardian citing a
survey by accounting firm Deloitte.
Based on the Deloitte report, only 3 per cent of
executive directors and 8 per cent of non-executives are female and suggests
that promoting more women into the most senior echelons of UK business may
have slipped down the agenda of big public companies.
'Companies have been focusing on changes to board
structure and composition which will ensure that they comply with the Higgs
recommendations and the new combined code,' says the report.
The findings of the Deloitte report reinforce the
findings of the Guardian's boardroom pay survey, published in August, the
paper pointed out.
The Guardian investigation, which covered the top
100 companies, found that 114 of the 1,400 boardroom seats at FTSE-100 firms
were occupied by women and only 17 were full-time executive directors. It
also discovered that one-third of FTSE groups did not have any female
representation at board level and that of the 187 directors who were paid
over 1 million (S$3 million) last year none were women.
Yesterday's report does offer some encouragement
to would-be female directors. 'There is evidence that FTSE 350 companies are
widening the pool from which they recruit non-executive directors, including
professionals from advisory firms and individuals from non-UK countries,'
said Rupert McNeil, a partner at Deloitte. That trend, he said, suggested
that 'the number of female board members will increase over coming years'.
- 6 Oct 2004 SINGAPORE
BUSINESS TIMES
MIT's
Chief
Susan Hockfield will become the first female president of Massachusetts
Institute of Technology in early December, taking on huge challenges at the
premier U.S. science school. She spoke with BusinessWeek's Boston
bureau chief, William C. Symonds, in her office at Yale University, where
she has spent nearly 20 years, the last two as provost. Now she's getting
ready to move to Cambridge with her husband, Thomas N. Byrne, a neurology
professor, and their 12-year-old daughter.
Why are you so concerned about the future of
U.S. science?
Because we're falling behind. We're not keeping up with other countries in
our investment in science and engineering. The science and math scores for
our high school graduates are disastrous. We're underfunding research in the
physical sciences, and we're lagging seriously on publications in these
sciences. This is a problem for our economy, and we have to think about
where we want to be 20 to 40 years from now.
What should we be doing at the K-12 level?
After Sputnik we turned our focus to math and science and were inspired
about this. My sense is that we have lost this. We need to raise
expectations. [Only] a small group of U.S. kids can compete with the best in
the world. But golly -- there are children in the next group who could be
world leaders but who don't have the opportunity because their education is
not sufficient. We need to reinspire the nation to value the people who work
in science and technology.
Why is the number of students majoring in engineering and the physical
sciences at the undergraduate level declining?
The life sciences and biotechnology are fabulous right now. But in the
physical sciences, the future is bleak. So when a student talks to a
guidance counselor and learns that funding is not good and that it will be
hard to go to graduate school, [he or she loses interest]. At the same time,
when many students arrive at college, their intellectual equipment is
insufficient for them to take on the rigors of a bachelor's degree in
engineering or the physical sciences. It is hard work.
What does that mean for our economy?
We see the consequences. If you look at any industry with a big demand for
people in the physical sciences and engineering, an increasing number of the
people working in those industries are non-Americans.
Yet now the number of foreign students coming to the U.S. is falling,
right?
Nationally we've seen a 30% falloff in applications for graduate school from
international students. A lot of things feed into this. It is very hard to
get into the U.S. now. Yet Canada, Australia, and Britain are making it
easier for people to go there for graduate education.
Why is that a problem?
People have come from around the world to be educated in the U.S., and they
have stayed. They have become part of America's economic engine. And it's
not the case that we have plenty of native-born Americans to fill these
roles. So if we cut off these opportunities, these people will go somewhere
else. And ultimately, we could lose our position as a world leader in
science and technology.
Why is it so important that women move up in the academic world?
Universities play an absolutely critical role. They are training the next
generation of leaders. And while I was not daunted by not having women
faculty, it is hard for [many women] to imagine a career [in a university]
without seeing someone to set the path. And second, the U.S. is falling
behind in our production of scientists and engineers. We need every person
in the nation who has a love of science and technology.
What do you think your appointment as president of MIT will mean to young
women?
I'm hoping it will give confidence to girls and young women that there are
opportunities that will be open to them that they can't imagine right now.
- 2004 October 4 BUSINESS
WEEK
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