Board Composition: A Strategic Asset or Challenging Weakness
In a recent article published by the National Association of Corporate Directors (NACD), A&M Managing Directors Conor Johnston, Paul Kinrade, Annie Peabody and Andy Walker examine how board composition can be a cornerstone for corporate success or an anchor that weighs down financial performance.
Alvarez & Marsal’s study of more than 3,000 companies across the U.S. and Europe sheds light on the tangible impact board makeup has on shareholder value, company agility and long-term outcomes. The data reveals how structural and individual board characteristics can either contribute to or hinder high performance.
Key Research Insights
Board Composition Factors That Influence Performance:
Tenure: Directors at high-performing companies served nearly 20% longer than those at low-performing ones.
Board refreshment: Boards with a wider range of member tenures, mixing fresh perspectives with seasoned experience, delivered stronger results.
Split leadership wins: Companies that separated the CEO and board chair roles outperformed their peers that combined the CEO and chair roles by 1.4x.
Right-sized boards by company type:
Fortune 100: Larger boards (12+ directors) outperformed their subsector peers by 2.6x.
Russell 2000: Smaller boards (fewer than 8 directors) outperformed larger ones by 6.3x.
Explore the full findings and learn what differentiates high-performing boards from the rest.
