The Boardroom

When Boardrooms Go Global


As companies expand their global footprint, they need to begin to focus on populating their boardrooms with well-qualified directors from outside their geographic regions. What can a director expect when taking on a board assignment outside of North America? And what does it take to be effective as a "global" board member? To find out, BusinessWeek.com columnist Beverly Behan spoke with Guylaine Saucier, who currently sits on two North American boards—Bank of Montreal ( (BMO.TO)) and Petro-Canada ( (PCA.BE))—as well as two French boards—(Danone ( (DANO.PA)) and Areva ( (ARVCF.PK)) ). Edited excerpts of their conversation follow: What have been some of the most notable differences you have found in serving on a European board compared with a North American one? One of the biggest differences with French companies is that they generally have a longer-term perspective. To give an example of this, they don't file quarterly statements—and are actually opposed to doing so because they want to avoid the pressure to hit quarterly targets which can lead to a very short-term focus. Personally, I view this approach very positively. Another difference, less positive from my standpoint, is that under French law each company must have two external auditors. The concept is to have one external auditor serve as a "check and balance" on the other. While this may sound like a good idea in theory, in practice, it tends to hamper transparency because the auditor that is being scrutinized tends to become somewhat self-protective rather than open in talking about any problems. What you've described are some of the differences in the legal framework that impact the board's operating context. What about board dynamics or board culture? Have you seen any differences there? Boards in Continental Europe still have a bit of an honorific mind-set, by which I mean that directors tend to view serving on a board as a bit of an honor whereas North American directors may have had that view at one time, but now tend to view serving on a board as less of an honor and more of a job. For example, it is not uncommon in Continental Europe for a CEO to sit on four or five boards, something we haven't really seen in North America for the past decade or so. Of course, the prevailing attitude in North America has become that it's difficult to get good governance when an active CEO is serving on so many boards. Yes. And that's a shift in perspective that I haven't yet seen in Europe. Any other differences you have observed? Another involves the relationship between the chairman and the CEO. In Canada, where most boards have outside, non-executive chairs, I would describe the relationship between the chairman and CEO as typically collaborative when it is working well. Reflecting this, you generally see the chairman and the CEO sitting beside each other in board meetings. In Europe, however, they typically sit opposite each other. This reflects a different dynamic in their working relationship, which tends to be slightly more confrontational. What advice would you give to someone from the U.S. or Canada who has made a decision to serve on a board outside North America? Sometimes North American directors have a tendency to feel that if a non-North American board is not following practices we are used to that we need to immediately try to impose to bring the other board "up to speed." I would urge patience. Take a little time to get to understand the board, the culture in which the board and the company operate, their legal framework, etc. For example, on one French board I serve on, they had never had a board strategy off-site, and I introduced this practice, which now they find really valuable. However, I waited to understand more about the company and how the board and management work together before I made this recommendation to make sure that what I was suggesting would work well in the operating context of this company. What are some of the challenges for an individual who is invited to join a board in Europe or on another continent? Obviously, you have to recognize that you are taking on a significant travel commitment to attend board and committee meetings on a regular basis when you join a board in Europe, Asia, or somewhere else that is very distant from where you're based. You need to be prepared to make that commitment, which is, essentially, a lifestyle issue. I really enjoy the time I spend in Paris working with my boards there and I don't mind being there for a week or more every month. I live in Montreal, and it doesn't take me any longer to get to Paris than it would take me to get to California, for example. However, if I didn't live close to a major international airport, or if the company whose board I was asked to join was located somewhere difficult to get to without a lot of aircraft changes, that could be a real challenge. Also, it takes patience and the willingness to learn about operating in a different culture.
Bev_behan
Beverly Behan has worked with more than 100 boards of directors over the past decade on issues including CEO succession planning, board engagement in strategy, board and director evaluation and general consulting to boards and CEOs on maximizing board effectiveness. She can be reached through her website: www.boardadvisor.net.

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