The Value of People Expertise on Corporate Boards | CIPD

HR Effectiveness

As organizational investors and stakeholders seek a greater understanding of the workforce and talent topics that enable success, boards of directors are increasingly interested in human capital issues. According to a survey by Russell Reynolds Associates (cited in a Harvard Law School Forum on Corporate Governance article), 259 global board directors rated HR as the top area to which they want increased exposure. Despite the increased focus on talent and workforce topics, this newly released 29-page CIPD report focusing on UK boards reveals that only 2% of boards have an HR director, and just 25% of FTSE 350 companies possess HR expertise on their boards (see Table 2). This lack of HR board representation starkly contrasts with the ubiquitous presence (100%) of Chief Financial Officers or finance directors on boards. The report delves into how HR professionals can increasingly interact with boards in three roles: 1) as senior managers (chief people officers or HR directors) advising the board, 2) as executive directors on the board, and 3) as non-executive directors (NED) on the board. The paper offers suggestions on how HR can add value in each role. Even for those not directly interacting with the board as Chief HR Officers, the paper provides valuable insights into the types of talent and workforce topics in which boards are interested.