(April 2019, SpencerStuart) On paper, it would seem that today’s boards of directors should have an obvious interest in bringing marketers to the table.
After all, the current business environment has changed dramatically from just a few years ago: Now, senior marketing executives play a key role in such areas as digital transformation and social media — in addition to the task of managing engagement and the crucial relationship between customers and brands. Today’s companies must know their customers, and with the growing use of data and analytics, it’s marketers who are able to bring the deep knowledge of what clients want and can help create a more personalized customer journey.
Nevertheless, the number of marketers serving as directors on Fortune 1000 company boards remains surprisingly low: Our research finds that only 26 of the thousands of public company board seats are currently occupied by marketing leaders. Importantly, this figure from public companies includes only marketers currently holding a CMO (or similar) title, and it does not count the plethora of former marketers who may have already moved into bigger GM roles. As boards look beyond CEOs as a pool of director talent — including executives with experience in technology, finance, marketing and other areas — we’ve found that additional opportunities are opening for women and minority executives.
While the numbers tell a dispiriting story for marketers aspiring to a non-executive role, the good news is that the tide may be turning. As we have watched an increasing number of talented marketers ascend into CEO- and president-level roles, it is apparent that their chances of landing board roles (as general managers) will increase.
And importantly, it is worth noting that most boards naturally skew older — the average age of S&P 500 directors is 63, according to our 33rd annual United States Spencer Stuart Board Index(SSBI) — and the majority of directors on publicly traded boards simply aren’t as fluent as CMOs in newer/disruptive business models and strategies. Consequently, we believe more boards will seek out the specialized knowledge that marketers possess, helping to facilitate a more “modern” conversation among non-executive directors. The CMO’s presence also likely will bring down the average age of the board as well.
The evolving numbers game
One obstacle keeps marketing leaders from wider representation on boards: Only a small number of seats become available on U.S. boards every year. As an example, S&P 500 boards appointed just 428 new independent directors during the 2018 proxy year, according to the 2018 SSBI. This modest rate of turnover means the average S&P 500 board added fewer than one new director over the year (0.88).
“Research suggests that humans are susceptible to ‘in-group bias,’ which means we tend to prefer people like ourselves,” Kim Whitler, associate professor at the University of Virginia’s Darden School of Business and a former CMO herself, told us in an interview. “So it is understandable that finance board members might prefer including more finance experts because they speak the same language and share a similar paradigm of how firms work.”
And not surprisingly, when openings become available, boards tend to prioritize leaders who have prior CEO or governance experience: Of the 428 new S&P 500 directors, 36 percent were active or retired CEO or president-level executives.
It’s relevant, then, that more marketers are becoming CEOs, which could lead to more board members who have a marketing background. Some 25 percent of CEOs have marketing experience, according to a study by Frank Germann, assistant professor of marketing at Notre Dame’s Mendoza College of Business, who analyzed the largest 233 publicly traded firms. Marketers tend to succeed at the C-suite level because they are “more agile, more versatile, and less risk-averse,” Germann said at an American Marketing Association conference. Indeed, several former marketing executives (and current directors) have gone onto bigger management roles, including: Sona Chawla, president of Kohl’s; Mary Dillon, CEO of Ulta; Brian Niccol, CEO of Chipotle; Russell Weiner, president, USA of Domino’s Pizza; and Mary Beth West, chief growth officer of The Hershey Company.
How marketers can increase their chances of getting on a board
For marketing leaders, serving on an outside board can be an enlightening, career-changing opportunity.
“Becoming an independent board member has been an enriching experience for me — it has made me a better executive, broadened my perspective across the full scope of the enterprise, and allowed me to use my digital, marketing and operational skills to have a positive impact in the boardroom,” said Trish Mueller, former CMO at Home Depot and director on Dave & Buster’s board. “The digital age has material effects across the entire organization, and it’s rewarding to be able to use my knowledge to inform leadership thinking on strategies for success today and in the years to come.”
But getting onto a board isn’t easy. For marketers aspiring to serve on an outside board, we offer up the following tips on how to position yourself for the opportunities that will arise – and may be more likely in the coming years.
Remember: It takes work
Board service can demand a significant time commitment: 32 percent of our survey respondents say they spend between 11 and 20 hours a month on board work (i.e., research, meetings, travel, etc.) As one executive said, “You will grossly underestimate the amount of time it takes to serve on a board, whether it’s a big or small company.”
Get involved now
A large public company is unlikely to be your first board experience. More opportunities are available on the boards of local nonprofits, universities, smaller companies and private companies, including private equity portfolio companies and advisory boards. Participating on these boards provides valuable experience, allows others to see you in action in a board setting and helps build relationships that can open doors to other opportunities. It is also an excellent place for you to sharpen your general governance skills while learning to focus on high-level strategic issues — as opposed to getting too far into the weeds on tactical issues.
Further develop your expertise
Become well-known as an expert in your field. For instance, some say technological acumen — and the ability to incorporate it into the customer journey — will be a crucial skill.
“I believe that the areas that will serve as differentiators will be technological chops and a focus on customer experience, using digital tools to complement a traditional business,” said Eduardo Conrado, former CMO at Motorola Solutions and current CDO at Ascension, and board member of ArcBest. “I think most boards are looking for a technologist who is customer centric to add to the board talent profile.”
Be prepared to talk about your “USP”
It’s important that you can clearly articulate your “unique selling proposition” and the value that you would bring to a board. Also, boards will want to hear about the challenges or governance topics that interest you or that you feel qualified to address, as well as what you hope to get out of a board assignment.
Make sure your boss is aware of your board aspirations
Alerting your CEO that you’re interested in a board role — and gaining their approval early in the process — will be valuable when opportunities arise. While it’s obviously important to have the leader’s approval, your CEO can also serve as a reference, which will be crucial in your efforts. Remember, your boss can also be a tremendous source of board leads for you, particularly if they are a big supporter of yours.
Build a wide network of advocates
Let friends and colleagues who serve as directors or board advisers know of your interest so that they can suggest you when an opening arises. Discuss your interest with your CEO, directors on your own board and other people you know who serve on boards or work with boards. You might also investigate attending a university business school course on boards, which could improve your chances for board placement. Several well-known colleges offer such programs, including Northwestern University’s Kellogg School of Business, Harvard Business School and Wharton School of the University of Pennsylvania.
More marketers = higher returns?
Another reason talented marketers may well become more popular in the boardroom: their presence can have a positive impact on company revenue. Organizations with at least one marketer on the board had a 3-percentage point increase in total shareholder return compared to a board with no marketing-experienced directors, according to a 2015 study by the University of Virginia’s Whitler, Ryan Krause from Texas Christian University and Donald R. Lehmann at Columbia University.
“One of the top challenges that boards and CEOs are dealing with is creating growth,” Whitler said. “And the knowledge that capable marketers bring to the board — such as how to create organic growth to drive profitable revenue — helps complement the more efficiency, compliance and monitoring competencies of the people who dominate boards (e.g., finance, accounting, operations, etc.). In other words, the boards that include marketers have a competitive advantage, as they can use this knowledge to help think about growth strategies and resource allocation decisions regarding growth.”
These factors are part of the reason marketers believe more marketing leaders will be appointed to boards in the coming years. Spencer Stuart recently surveyed more than 250 senior marketing executives (see chart below), and 73 percent of respondents agreed that marketers will continue to have a larger presence on boards. We should also point out that several CMOs sit on the boards of other noteworthy companies, such as Greg Revelle, CMO of Kohl’s, and Tony Weisman, CMO of Dunkin’. Other former marketing leaders have earned a place at the director’s table, including: Gary Briggs, former CMO of Facebook; Stephen Quinn, former CMO of Walmart; Becky Saeger, former CMO of Charles Schwab; Susan Thronson, former SVP of global marketing at Marriott International; and Joe Tripodi, former CMO of Subway.
Marketing skills are becoming more valuable
On an anecdotal level, the good news is that we have seen an increased demand for non-executive directors who possess “modern marketing” skills. Specifically, forward-looking boards are seeking directors with experience in digital transformation, social media, customer relationship management and loyalty, mobile platforms, and omnichannel retail. It appears that boards now realize the importance of ensuring digital, data, customer insight and social media are woven into corporate strategy, and marketers have the vision — and technical know-how — to do just that.
“One of the biggest areas of expertise marketers have is the ability to tie together many key areas of focus for businesses — some of these areas are data and technology, as well as overall enterprise systems to create personalization and connected customer journeys,” said Suzy Deering, CMO of sales and growth markets at eBay and board member of PODS. “Marketing is at the center of different types of companies, but something they have in common is the need to innovate faster to address a hyper-connected customer.”
Linda Boff, CMO at GE and member of the board of Dunkin’ Brands, agrees: “Marketers bring the voice of the customer to the table, which every company needs to consider — along with financials and governance. Increasing innovation, transformation and customer centricity is the purview of the CMO, and that’s a skill set that most boards would welcome.”
In other words, marketing insight — which for years had been seen as a “softer and creative” skill — is becoming increasingly valuable on its own and could eventually lead boards to prioritize more marketers for vacant board positions. Forty-two percent of respondents to the Spencer Stuart survey say marketers’ top skill is bringing consumer/client insights to the board, while 40 percent say the awareness of digital technologies is key.
“The board relies mostly on my general management experience, but it also draws upon my marketing experience, be it digital, brand management, sponsorships, internal communications, social media or consumer experience design,” said Raja Rajamannar, CMO and chief communications officer and president, healthcare at MasterCard, and member of the board of PPL Corporation. “There are a number of instances where my CMO experience was not only helpful, but critical.”
Beyond that, boards also need directors who have general expertise and can see the bigger picture, while also possessing this specialized knowledge and insight. Marketers tend to work across functions and have a deep understanding of areas such as strategy that are becoming increasingly important.
“With today’s rapid transformation in business, a management team benefits from having operators on the board, and CMOs are increasingly in the center of cross-functional operations,” said Seth Farbman, former CMO at Spotify and current board member at J. Crew. “That experience provides crucial insight that marketers should leverage.”
It would be understandable for marketers to look at the numbers and feel discouraged about their chances to be appointed to a board. But we believe the tide is turning and opportunities will present themselves to the very best marketing professionals. As the business landscape changes, the case for putting truly talented marketers onto boards will most certainly increase. Marketers’ experiences in areas like digital and social media represent a tremendous opportunity for companies, and they can provide the crucial insight and fresh perspective that boards currently lack. And for a select group of well-prepared marketers, we expect that more opportunities to help modernize boardroom conversations will be available. The question is: will they be ready?
Survey of Marketers
We recently surveyed more than 250 marketing professionals about their own experiences with boards.1
WHAT BOARDS ARE YOU CURRENTLY ON?
WHAT PIECE OF ADVICE WOULD YOU HAVE FOR MARKETERS WHO WANT TO GET ON A BOARD?
HOW MANY HOURS PER MONTH DO YOU SPEND ON BOARD WORK (I.E., RESEARCH, MEETINGS, TRAVEL, ETC.)?
DO YOU EXPECT THAT MARKETERS WILL BECOME MORE PREVALENT ON BOARDS IN THE COMING YEARS?
IF YOU ANSWERED NO, WHY NOT?
IN WHAT AREAS MIGHT MARKETERS BRING THE MOST VALUE TO THE BOARD?
1Percentages may not total 100% due to rounding
CMOs on F1000 boards*
|Lisa R. Bacus||Teradata||EVP & CMO at Cigna|
|Lynne Biggar||Voya Financial||CMO & chief communications officer at Visa|
|Margaret A. Breya||LSC Communications||SVP & CMO at MicroStrategy|
|Giuseppina Buonfantino||Carter’s||CMO at Kimberly-Clark|
|Lisa M. Caputo||Best Buy||EVP of marketing, communications and customer experience at The Travelers Companies|
|Jerri L. DeVard||Under Armour||EVP, chief customer officer at Office Depot|
|Susan Somersille Johnson||Constellation Brands||CMO at SunTrust Banks|
|Esther Lee||The Clorox Company||EVP & CMO at MetLife|
|Lori Lee||Emerson Electric||CEO, Latin America & global marketing officer at AT&T|
|Ann Lewnes||Mattel||EVP & CMO at Adobe|
|William P. Mansfield||Graybar Electric||SVP marketing at Graybar Electric|
|Jamie Moldafsky||R.R. Donnelly||CMO at Wells Fargo|
|Anindita Mukherjee||Hertz Global Holdings||CMO at S.C. Johnson & Son|
|Cynthia S. Nicholson||Selective Insurance||CMO at Feed|
|Michelle A. Peluso||Nike||SVP & CMO at IBM|
|Karen Quintos||Cummins, Lennox||EVP & chief customer officer at Dell|
|Raja Rajamannar||PPL||CMO & chief communications officer and president, healthcare at MasterCard|
|Ralph E. Santana||Dollar General||EVP & CMO at Harman International Industries|
|Philip Schiller||Illumina||SVP marketing at Apple|
|Marcella Shinder||CarMax||Global head of marketing at WeWork|
|Gail Tifford||Fossil Group||Chief brand officer at Weight Watchers|
|Deborah Wahl||Groupon||CMO at Cadillac|
|Karen Walker||Eli Lilly||CMO at Cisco|
|Kevin M. Warren||Illinois Tool Works||CMO at UPS|
|Kara Wilson||Paychex||CMO at Rubrik|
|Jacqueline Yeaney||Avaya||SVP and CMO at Ellucian|
*As of March 19, 2019.
A Snapshot of other CMOs on Boards*
|Phyllis Anderson||Andersen Corporation||Former CMO at Express Scripts|
|Katie Bayne||Ascenca Retail Group and The Honest Company||Former CMO of Coca-Cola North America|
|Michelle Bottomley||Bose||EVP & CMO of New York Life|
|Gary Briggs||Petco and Etsy||Former CMO at Facebook|
|Kathy Button Bell||Johnson Outdoors||CMO at Emerson|
|Cammie Dunaway||Planet Fitness and Red Robin||CMO at Duolingo|
|Anne Finucane||CVS||Former CMO at Bank of America|
|Lauren Flaherty||Brunswick||Former CMO at CA Technologies|
|Matt Jauchius||Core Molding Technology||CMO at Fifth Third Bank|
|Abby Kohnstamm||Tiffany & Co.||Former CMO at Pitney Bowes|
|Carol Kruse||Valvoline||Former CMO at Cambia Health|
|Jaya Kumar||Sabra Dipping Company||CMO at Capital Group|
|Kirsten Lynch||Stitch Fix||CMO at Vail Resorts|
|Jim Lyski||Ansira||CMO at CarMax|
|Sharon Rothstein||Yelp||Former CMO at Starbucks|
|Becky Saeger||E*Trade||Former CMO at Charles Schwab|
|Jennifer Storms||Dave & Busters||CMO at NBC sports|
|Roxanne Taylor||Pure Storage||Former CMO at Accenture|
|Joe Tripodi||Voya||Former CMO at Subway|
|Susan Vobejda||Cision||CMO at The Trade Desk|
|Lucas Watson||W.W. Grainger||CMO at Cruise Automation|
|Tony Weisman||Cardlytics||CMO at Dunkin’|
|Mary Beth West||Hasbro||CGO at Hershey|
*Includes CMOs on the boards of private companies and public companies not in the Fortune 1000.
By: Richard Sanderson, Eduardo Tobon and Greg Welch