Spencer Stuart: Building a First-Class Board of Directors Pre-IPO

The make-up of a corporate board is essential to the health and effectiveness of every listed company. The ideal board is comprised of a diverse group of directors. Companies who are planning an initial public offering have the ability to shape the board to reflect the direction of the business and to signify to the market about the strengths of the company. Spencer Stuart provides several recommendations and considerations for companies and sponsors thinking about board composition in preparation for an IPO.

Among some of the recommendations:

• Think holistically about director recruitment as opposed to one-off recruitments.
•  Develop a matrix of the overall skills and experience required for the board.
•  Use the skills matrix to ensure the bases are covered when recruiting.
• Think about the various diversity dimensions that would be valuable to include on the new board, including geographic representation.
• Determine the qualities and experience most critical in a lead director or non-executive chair for your new board.
• Outline specific requirements for key committee chairs.
• Consider specific constituencies that will be important to the board and recruit directors who are familiar with them.
• Determine governance parameters for the new board and the potential impact on director recruitment.
• Consider building upon the policies of the current board or peer companies.
• Assemble the principles to use in director recruitment.
• Define the desired board culture and personal director traits to ensure congruency.
• Plan kick-off events for new directors, including social dinners and a board orientation, that will model and reinforce the culture.
• Plan ongoing training and information sessions with the board to ensure all directors receive the company knowledge they need to effectively carry out their duties as board members.

Read the report.