Paper identifies current director profiles and strategies to ensure that a competitive edge is present in the boardroom for companies operating in China
Russell Reynolds Associates(http://www.russellreynolds.com/), a leading global search and leadership advisory firm, today released a white paper, "Being a Better Board: Why and How Western Corporate Boards Need to Appoint China Experts." The paper examines the growing need for China-focused experts as companies seek to expand their global competitive advantage.
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"Being a Better Board" identifies the increasing demand for corporate board members with significant expertise in doing business in China and the difficulty multinational companies face in meeting it. Only seven of the companies on the S&P 500 index currently have a director of Chinese or Taiwanese descent, as do just eight of the FTSE350 and five of the ASX All Ordinaries. Overall, just over 100 Chinese individuals are currently serving as directors of publicly-traded companies in North America, Europe or Australia.
The paper analyzes the way China's unique business environment demands specific director expertise, including an emphasis on a trusted network, the rapid development of the Chinese startup scene, fast-changing consumer taste and complex government regulations. These and other characteristics unique to China have created demand for a specific and niche skill set that multinationals need on their boards.
Until recently, board director candidates with expertise in China fell into five distinct categories: retired Chinese government officials, western-educated Chinese scholars, retired Chinese CEOs of multinationals' local operations, retired Hong Kong-listed company C-suite executives and retired C-suite Westerners who have spent significant time in China.
The best talent fit is not merely a cosmetic exercise of political correctness; the right director plays an important role in safeguarding the success and competitive advantage of a firm operating in China. The paper identifies and elaborates on seven key issues that modern global companies must consider as they seek the right professional and cultural fit of candidates on their boards:
- Reimagine the ideal profile: Consider non-CEOs as candidates.
- Know the motivations of the candidate: Generous compensation packages are not the only motivating factor.
- Be committed to China: Embrace Chinese culture as part of the business proposition.
- Double up: Consider both a Chinese director and a Western "China expert."
- Look overseas: Not all candidates are based in China.
- Go digital: Look for candidates that are part of China's vibrant innovation community.
- Chair the room differently: Be sensitive to cultural differences.
"We have seen an increase in demand for board-level China-native China experts and a limited supply of eligible talent," said Grace Cheng, Russell Reynolds Associates' Country Manager for Greater China.
The paper makes the point that companies can overcome the supply challenges by broadening their searches to new markets.
"We recommend that organizations look globally and remain vigilant in their search process," said Caroline Raggett, a member of Russell Reynolds Associates' CEO & Board Services practice. "We live in a very mobile and connected world, and companies must be committed to find the right candidates on behalf of shareholders."
Success in China for global organizations will depend on the quality of the advice they receive and the depth of relationships they can tap. Finding the right China board member is thus critical in regard to the long-term success of any business operating in China.
Whitepaper is available via Russell Reynolds Associates' website here (
About Russell Reynolds Associates
Russell Reynolds Associates is a global search and leadership advisory firm. Our 425+ consultants in 46 offices work with public, private and nonprofit organizations across all industries and regions. We help our clients build teams of transformational leaders who can meet today's challenges and anticipate the digital, economic and political trends that are reshaping the global business environment. From helping boards with their structure, culture and effectiveness to identifying, assessing and defining the best leadership for organizations -- our teams bring their decades of expertise to help clients solve their most complex leadership issues.
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