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Evidence that businesses are recruiting more human resource executives to serve on corporate boards of directors seems to be increasing. A recent survey conducted by the Society for Human Resource Management (SHRM) found that approximately 10 percent of 316 respondents reported that they had served on a corporate board in the past five years. Among the respondents whose organizations (for-profit and nonprofit) were governed by a board of directors, 19 percent reported that at least one HR professional served as a board director.
Data collected by IRS, the research arm of the U.K.-based web site XpertHR.co.uk, and the article “HR Executives Suddenly Get Hot” in the Dec. 14, 2009, issue of The Wall Street Journal (WSJ), suggest that organizations are seeking the expertise and input of HR professionals at high levels of their organizations, including boards of directors.
In the IRS survey of more than 250 HR executives, approximately 23 percent of the respondents reported that at least one HR executive served on their organization’s corporate board. For the WSJ article, reporters polled 101 large corporations and found that nearly two-thirds had a current or retired HR executive serving on their board. Taken together, the results of the SHRM, IRS and WSJ research might indicate that interest in recruiting HR executives for corporate boards is on the upswing, some HR leaders say.
'There's a Trend'
“I definitely believe there’s a trend that more businesses are looking for HR executives to join their boards,” said Libby Sartain, an HR consultant and former chief HR officer for Yahoo and Southwest Airlines. “When I left Yahoo, I was recruited to join several boards.”
Sartain, also a former SHRM board chair, now serves as a board director for Peet's Coffee & Tea Inc. and chairs the board’s compensation committee. She says that other board directors have come to appreciate and value her knowledge and experience in HR. She points to a recent phone conference as an example of how her HR expertise helped.
“In the phone conference, we were discussing bonuses and a new incentive pay plan, and several of the directors weren’t sure if they were comfortable with the plan and the way it was structured,” Sartain said. “I was able to tell them that other companies I had worked for or consulted with had implemented similar plans and that it was a common practice and that it worked well.”
This isn’t a new phenomenon, according to Sartain. “There has been a lot of focus on corporate ethics, hiring policies and bonus plans in the past two or three years, and the input from HR executives who have dealt with these issues for their entire careers is extremely valuable,” she said.
Sartain pointed to her peers at the National Academy of Human Resources (NAHR), which has bestowed fellowships to dozens of senior-level HR executives from Fortune 500 companies. Sartain became a fellow of the NAHR in 1998.
“I know by talking to the other members of the academy that many of them now serve on corporate boards,” she said.
The growing demand for top-level HR executives on corporate boards is a strong indicator that businesses recognize the importance of HR issues and need the skills that HR executives bring to the table.
HR Knows ‘Next’
“By the time you’ve achieved the senior levels of an HR career, you know that workplace issues are an integral part of every key business function,” said Robb E. Van Cleave, SPHR, IPMA-CP, chair of the SHRM Board and chief talent and strategy officer of Columbia Gorge Community College in Oregon. “I’ve worked on the corporate side and partnered with businesses as a six-term mayor in Oregon, and I’ve seen the importance of HR expertise firsthand. Corporate boards review presentations and then ask, ‘What’s next?’ It’s the HR executive who knows ‘next.’ It’s what we do.”
The results of the SHRM, IRS and WSJ research shouldn’t come as a shock to anyone who understands the value of HR management and what skilled and experienced HR executives can offer businesses, says Laurence G. O’Neil, president and CEO of SHRM and former chief of HR for Kaiser Permanente.
“This growing interest in chief human resource officers as outside directors isn’t surprising. Boards of corporations struggle with core issues like executive succession, talent recruitment and retention, accommodating growth and contraction, and managing acquisitions,” said O’Neil. “Boards increasingly know they can access the needed expertise from an expanding pool of experienced CHROs. These individuals have been at the center of critical business transformations in some of the most respected, high-performing organizations, such as GE, IBM, Raytheon, Home Depot and Pitney Bowes, to name a few.”
Bill Leonard is a senior writer for SHRM.
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