For the past seven years the Heidrick 8c Struggles Board Monitor has tracked and analyzed trends in nonexecutive director appointments to Fortune 500 boards, capturing the key attributes of new appointees-- their demographics, industry backgrounds, and functional roles, among other factors. For the past two years we have used a novel way of tracking the flow of experience onto boards, comprehensively looking at all of the substantial career experiences of the new appointees, which we believe provides a more telling picture of the actual expertise that Fortune 500 boards deem most desirable. In 2015, about six percent of new directors had substantial experience in health care (including life sciences, medical devices, and health care services providers like large hospital systems). While that's a relatively small percentage of the total, these skills were well distributed across industries of all kinds.
We believe that a number of converging trends and the formidable competencies that health care leaders possess could turn that trickle of health care experience onto boards into a tide. Here's why:
* A growing number of retailers, tech companies, consumer goods makers, and even industrial companies are entering the health care space. In 2013, 24 of the Fortune 50 had newly entered health care--including seven retailers, eight technology and telecommunications companies, and two automakers ("Health Care's New Entrants: Who Will Be the Industry's Amazon.com?" PricewaterhouseCoopers, 2014). Non-traditional players, in industries once thought to be far removed from health care, will be offering a broad array of products and services aimed at maintaining and improving health --monitoring systems, mobile apps, nutraceuticals, health advice, care delivery, and more. Most of these products and services will be offered directly to consumers, outside of the insurer/payer system, opening up opportunities for companies of all kinds as they offer more affordable health care alternatives.
* The opportunities are significant. In the U.S. alone, health care is a $3.2 trillion industry. And with the graying of America and rise in incidence of chronic diseases, it is also one of the fastest growing. Not surprisingly, many non-traditional players are eager to enter the market. Tim Cook, CEO of Apple, recently told Fast Company that Apple will enter the health arena, pointing out that the opportunities in the $9 trillion global health industry...