In an unprecedented year, a focus on experience

Board fundamentals—financial oversight and good governance—were crucial in 2020 as companies navigated through a global pandemic, geopolitical uncertainties, and economic recovery. Many directors found themselves working more closely than ever with executive teams to keep their companies afloat, and working at a faster pace than ever before. Boards were increasingly expected to not only address topics as wide-ranging as community responsibility, sustainability, and diversity in their own composition but to do so publicly. Furthermore, remote working and crisis management forced boards to operate differently—often outside their traditional schedule and agenda.

All of this, of course, affected how boards thought about the new members they added in 2020. In Mexico, where we are tracking new directors for the first time, companies listed on the BMV filled 27 seats. Sixty-three percent of those seats went to people with CEO or CFO experience, notably higher than the United States’ 51%. Furthermore, in Mexico, 93% of the new seats went to people with prior public company board experience, the highest share in any country we study.

Nearly three-quarters of seats, 74%, went to active, rather than retired, executives, a much higher share than the 57% in the United States and one of the highest shares anywhere in the world. Forty-one percent of seats were filled by people from other countries, consistent with Europe’s 40% and much higher than Brazil’s 15%. A third of seats were filled by women.

New directors found themselves joining boards dealing with myriad, unprecedented challenges, challenges that led many boards to reassess how they worked, as entire organizations were also doing. Many boards were faced with game-changing decisions. Some boards stepped back to analyze what they—and only they—could do to support their companies, with a focus on ensuring board members can support sound and swift decision making.

Looking ahead

Boards in Mexico are increasingly committed to their own effectiveness. We expect boards to intensify their focus on their role in supporting their organization’s purpose, including continued commitment to having the right people on the board. We also see boards innovating their refreshment processes. (For more on our perspective on board refreshment, see “Building the foundation for better board refreshment.”) In Mexico, we expect that many current board members will retire over the next three to five years. This should lower the share of incoming board members with prior board experience closer to global levels. The turnover will also help boards increase gender diversity and to fill seats with people with a broad range of relevant experience including nontraditional industry, functional, or regional experience in order to bring in new perspectives that will help companies maintain agility. 

We expect the directors added this year, all in all, to be part of boards that are more diverse, more committed, and more agile than ever.

Acknowledgments

Thanks to the following Heidrick & Struggles colleagues for their contributions to this report: Lewis Adams and Juan Ignacio Perez.