Once relegated to the lower echelons of company recruiting, human resources professionals are increasingly showing their value in the recruiting process at the highest levels of corporate governance. In her article "Corporate Governance and Director Selection: A New Role for Human Resource Executives," published in the Human Resource Planning Society’s book Restoring Trust: HR's Role in Corporate Governance, Julie Daum outlines some of the ways human resources can help boards both comply with new legislation and streamline the search process.
1. Identify needed skills.
At the beginning of a search, the board has to determine what skills and expertise the company will need over the next few years. By compiling information, HR can help develop a detailed position specification, outlining the strategic qualities and experience necessary for the open position.
At Edwards Lifesciences, Rob Reindl, corporate vice president of human resources, does just this. At the outset of each new board-member search, Reindl produces a list of characteristics and has existing board members rank them in order of importance. This way, the company has a specific picture of what skills are most desirable for a particular search.
2. Review the existing board.
The board should examine each of its members and assess what he or she brings to the board in order to size up the collective skills and experiences and look for gaps. HR can help design tools that identify and track the independence, skills and expertise of directors.
3. Anticipate openings.
Determine when there will be seats opening up on the board. HR can help keep on top of this information by tracking impending retirements and other information it has regarding board openings.
"I look ahead," Reindl says. "Right now I’m looking for someone with financial expertise because I know we’ll be looking for a new chair of the audit committee in a year."
4. Design a process.
New SEC regulations require that public companies articulate their "process for identifying and evaluating candidates to be nominated as directors," as well as disclose "minimum qualifications and standards that a company seeks for director nominees."
As boards seek out directors with very specific skills and expertise, who meet newly stringent independence criteria and who are able and willing to fulfill increasingly time-consuming boardroom and committee duties, they will have to be able to explain their methods. HR can help design a transparent process.