Where global boards are falling way short: of the thousands of directors who sit on Fortune 500 company boards, only 21 live and work in Asia and hold board seats at 20 of the Fortune 500. That is a perilous lack of growth market representation.

AuthorYap, Kathryn
PositionBOARD COMPOSITION

RESEARCH CONDUCTED by CTPartners shows that the vast majority of Fortune 500 companies, representing America's largest and most powerful companies, have yet to fill their boards with directors from Asia Pacific.

Global boards benefit from having director oversight represented by people who are familiar with all their markets, challenges and goals. This is particularly important for developing and highly distinct markets where things are changing quickly, and where rising threats and opportunities need to be identified quickly and addressed expediently. In most Asian cultures, being present in person is critical to cultivating important relationships, particularly with local governments, and understanding how to navigate around unique market structures.

[ILLUSTRATION OMITTED]

[ILLUSTRATION OMITTED]

Take China, for example. According to a report released by American Chambers Shanghai in February 2012, U.S. companies in China say that bureaucracy, an unclear regulatory environment, and a lack of transparency are key hindrances to business in this high growth market -- on top of rising costs and increasing competition. Global boards may be based far away from the action, but such concerns will be not lost on them, especially as nearly 70 percent of the companies surveyed by American Chambers Shanghai report that their revenue growth in China exceeded that of their operations worldwide.

China is just one high-growth market in Asia Pacific, a region that covers some 30 markets comprising over 5 billion people speaking over 2,000 languages. The complexities and unique characteristics of the various Asian markets pose great challenges to global boards that lack sophisticated and hands-on understanding of the Asian marketplace and customer dynamics. Cultural differences exist in markets like the U.S. or Europe, but they are not as diverse as they are in Asia.

Indeed, directors based in Asia can bring substantial expertise in international business and growth markets. They may also bring important business and official relationships and networks. In addition, they will also be able to better balance global policies and processes with the specific regional needs and differences of Asia Pacific.

Yet according to research conducted by CTPartners (see table), only 4 percent of Fortune 500 companies appointed directors from some of the world's fastest growth regions to their global boards in 2011. Of the thousands of directors who represent Fortune 500...

To continue reading

Request your trial

VLEX uses login cookies to provide you with a better browsing experience. If you click on 'Accept' or continue browsing this site we consider that you accept our cookie policy. ACCEPT