How to Achieve a Cohesive International Board

There was a time when boards were monolithic. Even if the companies they ran had foreign interests, board members would be clustered around the headquarters and the highest-ranking people based abroad would be senior agents or national business managers. All power was retained at the centre.

Those days are long gone. Businesses are more globally minded now, and board membership reflects this. But when NEDs are geographically dispersed, what conditions do they face, and how can cohesion be established and sustained?

The role of the Chair

When board members are scattered over several locations, it’s incumbent on Chairs to run meetings efficiently, ensuring that all voices are heard. They can make cultural adjustments to improve cohesion – as do CEOs – because practices across different continents can differ. In addition, in some geographies, Chairs arrange for expats to provide coaching for NEDs, helping them shape their skills and experience to deliver value in global markets.

A current Executive Chair with global organisational experience as a former Chair and CEO of a business based in Asia told us:

The importance of an international mindset

Chairs need a global mindset to sustain cohesion and must ensure their boards have breadth that is consistent with the geographies their organisations address.

That’s why it’s more important for board members to have a general understanding of the business and of the market in which it operates than to have specific regional knowledge.

That said, some geographies are more insular than others. For example, U.S. enterprises can be inward-looking, while Swedish businesses prefer European boards and Nordic boards in particular. It’s important for such organisations that boards reflect their local culture. However, they can often find themselves at odds with their nomination committees, who want to see wider representation that reflects the extent of the business.

Another factor is that in some countries such as South Africa, the cost of engaging these individuals - who often command high board fees in foreign currencies - must be approved by the remuneration and nomination committees and justified to shareholders. There’s also the risk of creating discrepancies with local directors’ fees, especially when competition is high and NEDs know they can obtain more attractive remuneration, prestige and intellectual challenge from larger organisations in bigger markets.

Global board composition is key

A truly global organisation needs to be able to draw upon people from a broad range of skills, experience and backgrounds. This means not just business considerations such as knowledge of an emerging market, but also more fundamental criteria such as gender and culture. However, for enterprises operating in more tightly focused markets this is likely to be less of an issue.

Long-distance relationships can take time to form, and it’s worth noting that long tenure, which is more common on European boards in particular, facilitates this.

The same Executive Chair observed: “The most valued contribution centres on what diversity brings in practice: different perspectives that strengthen board effectiveness. There is also an increasing recognition that the line between NEDs and executive board members is blurring, influencing how international NEDs engage and contribute alongside executives.”

Distance and practicalities

Covid-19 normalised the use of platforms such as Teams, but board meetings for large public companies are generally – and rightly – face-to-face. They typically take place four or five times a year, with perhaps one board trip over three days to visit a specific business or geography for the company/group. Our commentator agreed:

Face-to-face encounters tend to be preceded by dinner the evening before, which means board cohesion can be reinforced informally as well as formally. There is also the travel element: board members may share at least parts of their journeys back and forth with others. Some years ago, it wasn’t unheard of for international board meetings to take place every quarter and to last a week, but that doesn’t happen so much now.

There tend also to be one or two additional meetings virtually. These of course have their uses, but there is only so much that can be achieved in them.

Geography can indeed be an obstacle, not just in terms of travel but in terms of time differences making coordination difficult for virtual meetings, which is why some business owners hesitate to appoint board members in locations that are distant from the centre.

What’s more, being far from the organisation’s heart of power can affect the influence a NED has. It depends on how board meetings are conducted. If those meetings are face-to-face and the Chair is focused on inclusivity, it’s less of a problem.

Age-old truths

Building and sustaining board relationships over great distances has always been a challenge, and while technology can bridge these gaps and make communication immediate, other modern-day factors are pulling in the opposite direction – not least the extent to and the rate at which global market conditions can morph.

Tariffs, border restrictions, regulatory changes, international conflicts, geo-political difficulties in accessing raw materials, the promise and the threat of AI, evolving business models, consumer consciousness – all these factors and more make it more difficult than ever for businesses to chart and maintain a course.

On the whole, however, the benefits for the organisation in appointing international NEDs far outweigh the considerations from a cost and logistical point of view because of the invaluable guidance, advice, networks and expertise they bring.

Key takeaways

Below are practical moves leaders can implement immediately:

1. Design cohesion intentionally.
2. Ensure the Chair is accountable for inclusion.
3. Prioritise global mindset over local expertise and appoint NEDs who can think across markets.
4. Balance virtual efficiency with in-person trust- and influence-building.

In the face of all those challenges, the best thing a business can do is to ground itself in the things that matter, the things that have always mattered: in shared knowledge, shared experience, and a collective sense of commitment and responsibility.

For organisations navigating this complexity, partnering with an experienced advisor can make the difference. 
Odgers works with boards around the world to build the cohesion, composition and leadership talent needed to thrive across borders.

It’s about character. It’s about relationships. And it’s about teamwork.