The Yawning Skills Gap on American Boards

However, while companies spend countless hours fretting about the makeup of their management teams, few are addressing the need for globally experienced directors. As a result, we face a yawning skills gap in the boardrooms of American companies that could soon negatively affect the ability for companies to generate shareholder value. As a result, we soon will see differences between the returns of companies governed by boards with superior globalization skills and emerging market experience, and those led by under-qualified boards who either unwittingly veer toward the excessively risky or become overly conservative due to anxiety about risk in unfamiliar markets. One startling example of the latter concerns boards that have experienced a Foreign Corrupt Practices Act (FCPA) problem—they find themselves paralyzed for years after the failure, in effect, magnifying the cost of the initial lapse even more.

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