Dr Sabine Dembkowski and Kate Latham, Partner at The Inzito Partnership, presented insights into the challenges of Consumer Goods Boards in the UK.
Consumer businesses, whether they be retailers, consumer packaged goods or leisure organisations, are all too acutely aware of the seismic changes in business operating models that digital and technical transformation have unleashed. It is certain that change will continue, and at an unprecedented pace.
This has challenged all business leaders and management, whether they are leading a legacy business through transformation or are the pioneers creating new products, services or ways of consuming/buying. Transformation is the new normal and innovation is in constant demand. Everyone acknowledges that agility and speed to market are the utmost of importance. But what does this mean for Plc Board directors who are balancing their fiduciary duty of care with the need for agility and speed? And how fit for purpose are Plc Boards in a rapidly changing world?
- Whether Board composition has changed in response to the strategic opportunities and risks that arise from technological innovation;
- The profile of those with digital/technological experience and know-how. Do they have characteristics that differ from the other members?
Our analysis included all 57 FTSE 350 Consumer organisations and our findings led to a number of questions:
- Circa 30% of listed consumer organisations have at least one member on the Board with explicitly stated digital expertise. Therefore, circa 70% of organisations do not a not have a single non-executive director with meaningful digital or technological expertise. Why is this? Do consumer companies have sufficient digital talent on the Board? Is this remiss given the changes rocking the business world led by digital disruption? Or are Boards accessing their digital know-how through other means (such as digital advisory boards)?
- The UK, and particularly London, prides itself as an innovation hub for digital tech entrepreneurs and yet circa 75% of Board members with explicitly stated digital expertise had gained their experience in a US organisation. Do we need to do more to develop homegrown talent? Is the search for the elusive “digital NED” academic when the fight for talent is so fierce? Do we need to seek more imaginative solutions?
- The analysis of the age profile of non-executive directors demonstrates that Board members with explicitly stated digital expertise are significantly younger than the average age of all Board members. In fact, the age difference is currently over ten years as the mean age of FTSE Board members is circa 59 whilst those with digital/technological expertise is circa 49. Do Boards need to do more to invite the next generation of executives and entrepreneurs to take a seat at the table? And how do you balance this with length and breadth of experience?