Around 60% Indian companies looking for new board director: Report 

Two-thirds (66 percent) of respondents see the two-term limit mandated by the Companies Act as an opportunity to support the need to add new skills and fresh thinking to boards.

Three in five (59 percent) of companies in India are undergoing a board refresh or hiring a new director in the next 12-18 months, revealed a report by executive search firm Heidrick & Struggles.

About three-quarters (74 percent) cite the retirement of a director as the reason they are undergoing a refresh, and one in two (48 percent) aim to infuse new skill sets into their boards, according to the 2024 Heidrick & Struggles India CEO and Board Survey.

The survey analysed responses from current managing directors, board chairs and chairs of subcommittees in India to understand their business priorities for 2024 and their perception of the board refresh.

Amid a talent war, half (50 percent) of those surveyed indicated the top challenge they anticipate when undertaking the refresh is access to the right talent. With key areas such as cybersecurity risk (32 percent) and incorporating AI (31 percent) being top issues, organisations are expected to face in the new year, many recognise the need to identify board members who possess the skillsets and capabilities relevant to navigating these new challenges.

ALSO READ | Only 15% of workforce are high potential employees: Deloitte study

In addition, two in five (41 percent) respondents emphasise prioritising executive experience when appointing new directors to Indian boards. Despite senior leaders taking the initiative to obtain additional certifications and training to bolster their credentials, many large companies still have a strong preference for hiring leaders with prior board experience.

“To build future-ready leadership, companies are encouraged to look at implementing robust succession planning, for a dynamic and inclusive boardroom. Whether a board ultimately appoints an internal or external successor, companies must start long-term succession planning sooner. This leaves more room to consider candidates with various strengths and skill sets that lead to building a stronger leadership bench. Embracing first-time candidates can also expand the talent pool and infuse boards with diverse perspectives and untapped capabilities,” said Suresh Raina, Partner in Heidrick & Struggles India.

Prioritising cross-sector experience and specialised backgrounds

Two-thirds (66 percent) of respondents see the two-term limit mandated by the Companies Act as an opportunity to support the need to add new skills and fresh thinking to boards. Almost half of respondents (46 percent) indicated that in terms of board diversity improvements, cross-sector experience should be a key focus. This is aligned with the wider senior leader talent landscape, where organisations are looking for subject matter experts and specialists.

There is also a move towards finding talent with deep expertise to fill in gaps in the boards where traditionally directors are more generalists.

ALSO READ | IIMs struggle over summer placements, only 20% succeeds in 2 months, stipends down

According to the report, building future-ready boards will be a top priority for Indian organisations as they undergo ‘The Great Board Refresh’. Companies are increasingly recognising the value of board members who can bring subject matter expertise, cross-sector experience and a fresh perspective to the table. To gain a competitive advantage, it is important to also integrate succession planning as part of the ongoing board process.

The report suggested that organisations must adopt a long-term approach to director hiring by starting succession planning sooner. This begins with identifying the organisation’s strategic objectives and purpose, evaluating the board’s current capabilities against said goals, and filling the gaps in skills or backgrounds.