Over a Third of Boards Lack an Onboarding Process for First-Time Directors, Survey Shows

Equilar, Ellig Group, the Nasdaq Center for Board Excellence and the Society for Corporate Governance recently collaborated to survey 176 public companies on their director onboarding processes and the success of first-time directors. According to the new survey, 34% of public company boards currently do not have a formalized onboarding process in place for their first-time directors. The statistic is alarming considering the same survey shows that 90% of companies added at least one first-time director over the past three years.

"This important survey confirms what many of us have thought for years?the effectiveness of first-time directors can be seriously enhanced through a strategic onboarding/training effort," said Janice Ellig, CEO of Ellig Group. "This is what we seek to make available to each of our clients so new directors can maximize their strategic impact from day one."

As organizations strive for sustainability and innovation, the selection and integration of first-time directors play a pivotal role in shaping a company's future. First-time directors are expected to contribute and play a role in a board's success. However, 23% of survey respondents expressed concerns that their first-time directors are not engaged and do not contribute meaningfully in strategic discussions.

"The transition into a board role is a journey for first-time directors, and successful onboarding practices can expedite the ramp up and contributions of a new director," said Belen Gomez, Vice President of Strategic Initiatives and Communications at Equilar. "Given 23% of surveyed participants noted the lack of engagement and meaningful contribution from their first-time directors in strategic discussions, this underscores the need for more effective integration strategies and support mechanisms."

In addition to the absence of an onboarding process, the lack of engagement from first-time directors may be tied to missing mentorship. The survey shows that 71% of companies do not assign their first-time directors a "buddy" or mentor during the onboarding process. Survey respondents most commonly cited "contributing too little to board conversations," "poor cultural fit" and a "lack of preparation" as the top reasons first-time directors are unsuccessful.

The largest portion of survey respondents identified as either their company's General Counsel or Corporate Secretary (48%), but responses were also captured from Chairpersons, Lead Directors, Nominating & Governance Chairs, CEOs, CHROs, Board Members and other roles. The companies represented by the survey span 10 sectors, with most having market capitalizations above $1 billion.

"As responsibilities and expectations of directors further evolve, the focus on onboarding to facilitate a smooth transition of a new director to board service and to maximize the potential for early and meaningful engagement should intensify," said Andrew Fitzsimons, Interim President & CEO of the Society for Corporate Governance. "The survey results reinforce the pivotal role our core members play in new director onboarding, with the General Counsel or Corporate Secretary most commonly leading the process."

For further findings, download the full survey results.

About Equilar

Equilar is the leading provider of executive intelligence solutions. The company's expertise in relationship intelligence drives state-of-the-art business development and CRM applications, board and executive recruitment, and compensation and governance strategies. Equilar integrates its extensive database of executive profiles with natural language processing and machine learning AI to enable real-time relationship analytics and targeted outreach for its global clients. Equilar's commitment to excellence has made it the go-to solution for over 1,000 companies, including 75% of the Fortune 500, top PE/VC firms and leading professional services entities. Learn more at www.equilar.com.

About Ellig Group

Tracing its lineage to the 1977 founding of legacy firm Gould McCoy, Ellig Group, a female owned and led search firm, has a long-standing reputation of advancing women and underrepresented groups. Recognized for its high-touch search process, exceptional professional network and significant track record for over two decades of driving parity in the C-suite and boardroom.

About the Society for Corporate Governance

Founded in 1946, the Society for Corporate Governance is a professional association of over 3,700 governance professionals who serve 1,600 public, private, and not-for-profit entities of most every size and industry. Members are responsible for supporting their boards of directors and executive management with, among other things, corporate governance, disclosure, securities law regulation and compliance, shareholder relations, annual meetings, and subsidiary management.

To learn more about the Society, visit us on LinkedIn, on Twitter @Society4CorpGov, or at www.societycorpgov.org.