Governing the Global Company

How Is Globalization Changing Corporate Boards?

Companies are increasingly encountering global opportunities and risks, but globalization has yet to permeate the boardroom itself; most boards of directors are not as geographically diverse as the companies they represent.

A new report by the Marsh & McLennan Companies’ Global Risk Center and the National Association of Corporate Directors (NACD) focuses on globalization’s implications for boardrooms and the challenges for the boards of global companies.

Governing the Global Company: Oversight of Complexity is based on interviews with nearly 30 directors and highlights the geopolitical, regulatory, legal, and compliance complexities that come with expanded global operations. These governance demands are changing boards in three ways: overall composition, processes, and director skill sets.  

Diverse Skills and Experiences Needed

In a marketplace that is increasingly global and connected, companies must “think globally and act locally.” Directors with international experiences and sensibilities are vital for organizations’ ability to identify and assess risks — and connect with customers and talent — around the world. However, board geographic diversity remains low in many countries.

Governing the Global Company