Institutional Investors, private equity, family office and owners are looking for having
in place “performing board” meaning, beyond representing and protecting their interests,
setting the company’s direction and ensuring strong governance, overseeing and supporting
the CEO while holding leadership accountable, monitoring performance and ensures
longterm value creation.
The First Revolution: Diversity Became a Corporate Governance Imperative
Those boards for long time were not diverse. Boards were long homogenous, both
demographically and cognitively. Investors and society eventually recognized that this lack of
diversity limited oversight quality, reduced perspective variety, and increased groupthink risk.
Then the investors and owner realized that their boards needed to represent more the
diversity of the society and of the workforce to better understand the dynamic of the worlds
around their businesses. Boards began acknowledging the need for more diversity around
2017, driven by investor pressure from groups like State Street, Vanguard, and BlackRock
calling for more women on boards. Momentum accelerated after 2020 with U.S. social
movements and regulatory actions like California’s diversity laws and Nasdaq’s disclosure
and “comply or explain” requirements. In Europe, the push came earlier and was more
regulatory: the EU required companies to have 40% women among nonexecutive directors
or 33% among all directors by 2026, driving faster gender diversity progress than in the U.S.
The rationale across regions was similar: diverse boards bring better perspectives, reduce
groupthink, strengthen governance, and improve transparency and accountability.
Overall, societal pressure, investor expectations, and regulatory action especially
strong in Europe made board diversity a core part of modern corporate governance. Now
with the ESG standards and reporting the requirements and visibility will be even stronger
That was the first revolution concerning the structure of the board.
Looking at Today’s Boardrooms: What Do We See?
Despite progress on diversity, the professional backgrounds of board members
remain strikingly homogeneous. Most boards are still populated by: Former CEOs, Former
CFOs Often from the exact same industry. At first glance, this seems logical. Familiarity with
the sector can accelerate understanding and facilitate productive debates with executives.
But three issues deserve careful consideration.
- Past Success vs Future Success in a VUCA World
Relying on former industry leaders assumes that past achievements predict future
performance. But we operate today in a VUCA environment volatile, uncertain, complex,
ambiguous characterized by disruptions few leaders ever faced in their prior executive
careers. Strategies, playbooks, and “recipes” that worked 10 years ago often fail today. In
this context, challenging executives through the lens of past industry experience can:
Slow down strategic decisionmaking
Create confusion for management
Anchor the board to legacy thinking rather than future opportunity
Undermine the agility companies desperately need
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Experience matters but outdated experience can be dangerous.
- Bringing Outsiders Into the Boardroom Can Help If Done Properly
Introducing nonindustry board members can add fresh thinking, new mental models,
and broader perspectives. But this only works if: Their role is clearly defined, Their
contribution is additive rather than copypaste benchmarking They complement not replace
relevant industry knowledge. From my perspective, the chairman should come from the
industry, serving as a bridge anchoring discussions in operational realities while enabling
other board members to bring diverse professional expertise. A healthy balance matters, not
a binary choice. - The Leadership Drift Risk: When Former CEOs and CFOs Take Over
Former top executives often carry strong leadership instincts and sometimes strong
egos. Once they feel familiar with the business, the temptation to step into operational
leadership can emerge. As my peer Gabriel Morelli recently observed, this is the worstcase
scenario for any company: a board that crosses the boundary into management .The
consequences are predictable: Confusion of roles, Loss of CEO authority, Strategic
execution failures, Organizational disengagement.
Boards must challenge. Boards must guide. But boards must never lead the
company. In my view, an effective board structure combines :A chairman from the relevant
industry .Board members with a mix of industry and outofindustry backgrounds. Leaders
who demonstrate not only IQ and EQ, but a very high level of AQ adaptability quotient.
Individuals capable of working with empathy, agility, and strategic distance A team dynamic
built on constructive challenge, not operational interference. This brings us to the second
revolution.
The Second Revolution: Integrating Human Capital Expertise at the Board Level
If the first revolution was about representation, the second is about relevance.
We know today that business success is fundamentally about people. And yet,
despite overwhelming evidence that strategy execution depends on culture, leadership,
engagement, and organizational health, boards remain structurally underequipped in these
areas. Now speaking still about the structure of the board, it is time for me to call for the
second board revolution.
Having a large majority of board build with former CEO and CFO is that right when
we know that business is all about people ? The best strategy can be set, endorsed by the
board, but fully failed due to poor execution and people engagement. Some will say it is not
the board responsibilities but the ceo and management team are accountable for execution.
It is tactical and the board is normally focusing on long term value and on strategy to achieve
it. In reality it is not always the case, it depends of the circumstances and on the people on
the board
Boards Are Increasingly Pulled into Workforce Matters But Often Without the Right
Expertise
Some boards are indeed paying more attention to human capital, sometimes
because legislation and ESG reporting requirements force it, sometimes because they face
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continuity risks related to leadership pipelines or succession. However, the skills on boards
often do not match the human capital oversight they are expected to provide: Boards are
expanding oversight into human capital, culture, talent, AI impact and workforce risks, but
very few directors have HR expertise. Leadership and manager development with AI is now
the 1 priority for HR leaders globally, reflecting increasingly complex workforce challenges
that boards also need to understand. Nearly all CHROs globally plan to strengthen
organizational culture, acknowledging its centrality to performance yet boards rarely have
the expertise to challenge or guide this. And yet, HR professionals occupy less than 2% of
board seats today, a striking mismatch given how central people are to strategy execution
and long-term value.
Why HR Must Be on the Board: The Value Case
A modern board cannot credibly govern a company without deep insight into
workforce dynamics, especially when: Employee burnout is widespread, with over 40%
reporting high levels of stress. ] Employee experience and culture stagnation are major risks,
with only 60% of employees feeling the right people are recognized for their efforts
Leadership pipelines are shrinking, with half of Gen Z avoiding middle management roles.
Trust is declining, with employee trust dropping sharply in multiple regions. Boards without
HR expertise struggle to ask the right questions, evaluate organizational health, or foresee
peoplerelated risks that jeopardize strategy.
In contrast, a Chief People Officer on the board brings among other points:
Expertise in culture, leadership, and succession, critical to continuity and strategy.
Understanding of workforce risks, now recognized as governance issues.
Datadriven insight into engagement and organizational performance.
Ability to translate organizational signals into strategic implications
A people-first lens in discussions dominated by financial and operational metrics.
The Second Revolution: Make HR a Standard Board Competency, appoint more
CHROs
After improving gender and demographic diversity on boards, the next step is to
diversify professional expertise and the most urgent gap is human capital. Given the
overwhelming evidence that people are the primary drivers of both success and failure, HR
leaders must move from occasional presenters to full board members.
Today, with HR professionals making up less than 2% of board directors, we are leaving a
critical dimension of governance unaddressed.
It is time to correct that.
Conclusion :
If the first revolution made boards look more like society being more diverse, the second
revolution will make boards think more like the organizations they govern. Strategy is written
in the boardroom but it is executed by people. Until boards bring human capital expertise to
the table, they will continue to oversee the future with only half the instruments required to
navigate it. The companies that win the next decade will be those whose boards finally put
