Risky but rewarding: globalizing the board; homogeneous boards are an outdated model in a world still so full of differences.

• Author: Mandl, Alex J.
• Position: Global Governance

BUSINESS IS going global, and so are boards -- or at least they should be if they are to maximize their effectiveness.

Regardless of a company's size, product line, management structure, or even its headquarters' location, boards that are made up of members hailing from different countries and regions are increasingly essential to success.

Unfortunately, all too many boards remain homogeneous. In fact, a surprisingly large number of major multinational concerns have boards that disproportionately reflect just one country.

This will change because business will demand it. Today's multinational boards, in fact, will be the models for virtually all of tomorrow s companies.

Diverse boards are even likely to be prerequisites for companies that don't distribute their products beyond their national borders. These concerns often extend their reach to international waters by sourcing supplies and raw materials overseas, relying on off-shore manufacturing or assembly, or even competing in home markets against foreign companies.

In rare cases in which a company is now totally insular, chances are it won't remain so for long as businesses and markets race to globalize.

One of the best ways to address the challenges that globalization brings is by developing a board with members who have far-reaching international experience. Gemplus International SA has come to realize the benefits of such a board, even if its advantages can be overshadowed from time to time.

Many see Gemplus, with a headquarters in Luxembourg and a strong presence near Marseilles, as simply a French technology concern involved in the smart cards market.

This description is accurate but limited. With 93% of its sales outside of France in regions and countries that stretch from Europe to Asia and North America, Gemplus is internationally focused. Its board reflects this diversity through its members, who come from the U.S., France, Germany, and Asia, among other locations. National diversity, in fact, extends through the company's executive management team.

There is no denying that such diversity can bring its own special challenges, hurdles that in many cases wouldn't surface in more homogeneous boards. Yet it is essential that companies looking to leverage a multinational board's strengths embrace its diversity even with its challenges. This is the only way to ensure management draws out the wealth of understanding, insights, and regional...