Bringing on Foreign Directors Has its Challenges

December 9, 2010 (PLANSPONSOR.com) – More than half of non-national foreign directors who serve on boards stated they joined because they respect the CEO of the company, according to a new survey.

A news release about the poll said three-quarters of corporate board directors indicate the top reason their board recruited foreign directors is for their experience or insight in a country that was important to the company.  These are among the findings of a study conducted by Egon Zehnder International, a global executive search firm and Global Navigation, an education resource for board directors of multi-national corporations.

“U.S. Boards are increasingly eager to recruit foreign nationals as directors; they can provide valuable intelligence and assistance in key markets, but the relationship has to work equally well for both the individual director and the board. Understanding what motivates boards to recruit non-US directors, why foreign nationals wish to serve on US boards, and how satisfied each side is with the experience, is critical in ensuring a successful recruitment process as well as the likelihood that both the board and the non-US director would repeat the experience,” said George L. Davis, Jr., co-leader of the Global Board Practice, Egon Zehnder International, in the news release.

But there is apparently a mismatch regarding expectations being fulfilled.  According to the study, 66% of directors indicated the foreign directors exceeded board performance expectations, while only 36% of foreign directors stated that their experience had exceeded their expectations.  The majority of both foreign director respondents (84%) and fellow director respondents (91%) would add another non-national director to their board.

The Board Globalization Research Study was sent to non-national directors and directors who serve on boards with non-national directors of companies headquartered in Australia, Bermuda, Canada, China, France, Germany, Holland, India, Ireland, Israel, Italy, Netherlands, Singapore, Spain, Swiss, UK, USA.

More information is at http://www.egonzehnder.com/us/clientservice/boardconsulting/publications/publication/id/17500132.

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