Asia-Pacific Will Continue To Pace Global Growth In 2016

JAKARTA, Indonesia January 27, 2016 – Despite headwinds from the global economy, Asia-Pacific will continue to be the leader for global growth in 2016, confirms John Vijayarangam, Chair of the Asia-Pacific Region for Cornerstone International Group.

Asia-Pacific executive searchThe Regional Outlook Report, published today, is the first of an annual series of regional and national business outlooks prepared by member offices of the global executive search network.   Cornerstone International Group has 65 offices in 29 countries around the world, including 18 in the Asia-Pacific region.

After decades of double digit growth from China, growth in the emerging Asia (Southeast Asia, China and India) is projected to moderate gradually to an average of 6.2% annually.

China is slowing to a more sustainable pace and this will affect the growth prospects of the rest of the region as export demand drops and investment flows decline.  Japan is expected to see growth pick up following a year of stagnation.

 

ASEAN Economic Community Launched

“A much anticipated step at the very end of 2015 was the creation of the ASEAN Economic Community,” says Vijayarangam. “If this succeeds as a barrier-free common market among 10 countries, it would have a combined GDP of $2.4 trillion.”

The widening difference in economic performance between Asia’s two giants is expected to be increasingly evident in 2016 with India’s economic expansion continuing to outpace that of China.  India’s output is expected to grow by 7.6% this year, among the highest in the region, compared with China’s 6.4%, but India is a much more recent contender with GDP roughly one fifth that of China.

Indonesia and Malaysia, being exporters of non-oil commodities (prices have fallen sharply), will be affected by the trade swing.  India, on the other hand, is expected to pick up to one of the highest levels in the region. Among the ASEAN-5 and the CLM (Cambodia, Lao PDR and Myanmar) countries, growth in the Philippines and Vietnam will lead with 5.2%.

As Asia becomes the vanguard of economic development, Cornerstone with its strong network will be at the forefront of global Executive Search and HR consulting, providing strong support to multinationals and local business in Asia.

Details of the 2016 Regional report can be found here on the Cornerstone International Group global website.

National business outlooks have also been published for China, Hong Kong and Taiwan.

 

Hong Kong

The softening Chinese economy and a decrease in Chinese tourist arrivals is expected to adversely affect Hong Kong in 2016.  Read more…..

Taiwan

The weakening Chinese economy (Taiwan’s largest trading and investment partner), and the impact of the newly signed China-South Korean FTA is expected to soften Taiwan’s macroeconomic environment to 2% – 2.6%.  Read more…

China

The economic transition facing China is expected to be choppy as the government responds to both a slowing global economy and internal structural problems, especially shrinking labor force supplies, rigid currency and financial infrastructure and overstocked property markets.  Read more……

Look out Tiger Woods, I’ve Got a Plan!

On a recent flight I took on Southwest Airlines, the cover story in their in-flight magazine was about Dan McLaughlin and his experiment to become a professional golfer. At the age of 30, Dan quit his job to pursue a career as a professional golfer. The interesting twist is that he had never played golf before but was motivated by the thought of being a professional golfer. He committed to 10,000 hours of dedicated practice to mastering the game. The 10,000 hour experiment was popularized by Malcolm Gladwell the author of Outliers. 

The magazine covers Dan’s story over the past five years and his 5,700 hours of golf practice. His history of quitting the pursuits he started was a motivating factor for Dan. Even his family members felt like this was just the flavor of the day for Dan and he would quit the experiment before completion. His girlfriend told him that she would not continue her relationship with him because this was crazy in her mind. His golf club sponsors have come and gone and he continues his pursuit. Good for him!  I was proud of him and glad he had some funds to pursue this goal even though it was taking him much longer than he expected.  He only has 4,300 hours to go and is blogging about the experience and hopes to write a book. Should be an interesting read.

Golfer

The reason this article stuck me so deeply is that it reminded me of employees that are released from their employers and the hours it takes to become a professional job searcher.  People do not have 10,000 hours to become experts in job search. Take the example of Dan, in the Southwest story, who is into his 6th year of the experiment. He has hit within two strokes of par once and is golfing much better each year.  However, there has still not been any invites to join the PGA Tour as a professional golfer and not any prospects of this happening for some time to come.  

Job search is important not only for a way to financially support oneself, but for the well-being of the person, their family, their community and their future employers. For companies that have reductions and offer assistance to their employees, unemployment claim time is reduced, risk of liability is reduced and contributions to society is accelerated.

The professionalism of Career Development Partners’ transition team is over 70,000 accumulated hours of training our participants in job search. An unemployed person does not have 10,000 hours to become a professional expert in job search.

Companies that have reductions and provide career transition assistance to their employees are getting our experience in helping their people not only land faster, but a better fit for their skills and abilities. Better fit means moving into the role of active contributors vs. consumers. Harvard Business Review September 2015 said that “employees offered career transition assistance land 2.7 times faster.”

I commend those companies that provide assistance to employees that are propelled out into the job market as job seekers.  Career transition assistance launches our participants forward in a powerful way for success and contribution to society.

Recently we provided career assistance for a company that experienced a reduction of workforce with customized programs for professional level employees all the way to the shop personal. I was visiting with a number of their employees in the shop foreman’s office as the notifications were coming to an end and heard some encouraging conversations. One of the supervisors were sharing about the compassion of their company for providing assistance to all their employees throughout the plant. Another person said it sent a strong message to those that were not impacted that “our company cares about all their employees.” He said he was proud to work for a company like that.

Job search takes 10,000 hours to become an expert if Malcolm Gladwell’s theory is true.  With assistance, Career Development Partners makes expertise happen with 70,000 hours of accumulated experience plus from our team of professional career coaches.

Feedback from our customers commonly state, “not only do we protect their brand in the marketplace, but we enhance their brand.”

When we meet a person on the day of their release, we have the opportunity to brag on their employer because their company has invested in their future and we have been selected to assist them in the job search process.  What a great honor we have every day to impact lives.  

What to Watch For in 2016

Each year I find myself declaring that the profession of directorship has become more challenging than it was in the previous year. I believe we’ve now reached the point where we should recognize this escalation as the status quo, not an annual anomaly. The Securities and Exchange Commission’s director qualification disclosure requirements, the advent of proxy access, and the increasingly public role of shareholder activists have contributed to a business environment in which directors’ qualifications and performance are continually scrutinized.

Kenneth Daly NACD CEONACD’s mission is to help directors lead with confidence—and to foster stakeholders’ confidence in their directors’ ability to effectively serve their companies. I’d like to highlight three critical issues that we believe directors—of all company types—should focus on during the year ahead.

1. Director Awareness

The dramatic slowdown in China’s economy, plummeting oil prices, recent terrorist activities, and the rise of the digital economy have put a fine point on the need for directors to be aware of disruptors that may cause a drastic change in sea conditions for their organizations.

No one can be expected to anticipate every potential disruption. (Who could have seen Uber idling around the corner?) But foresight comes down to one deceptively simple practice: asking the right questions. Are board members exploring the possible impacts of a terrorist act on the company’s supply chain, investigating their organization’s vulnerability to a cyber attack, or considering new competitors that can bring products to market faster than ever before and with nominal investment?  Throughout 2016 ourNACD Directorship 2020 initiative will continue to focus on disruptive forces, putting a spotlight on the issues that may affect your companies in the years to come.

Suggested NACD Resources:
Environmental and Innovative Disruption: What Directors Need to Know
Leveraging Social and Demographic Trends

2. Shareholder Activism

It goes without saying that activist investors have gotten our attention. A record-setting 355 activist campaigns were announced in 2015, including 33 against Fortune 500 companies. Last year was also a record year in terms of activist campaigns resulting in board seats—127 resulted in at least one board seat for the activist or the activist’s appointee. Our own annual survey of public-company directors found that 20 percent of respondents’ boards were approached by an activist investor in the past year. But nearlyhalf of respondents reported that they are unprepared for an activist challenge.

Activists aren’t practicing black magic; they are performing effective due diligence and smart analytics on their holdings. Boards need to think like activists and anticipate the issues these investors may raise. Do your company’s metrics fall outside industry norms? Does your board composition have any perceived weaknesses? Do you engage with management about the assumptions that undergird your company’s strategy? In 2016, NACD will continue to provide resources that can help your boards to anticipate—and respond to—emerging issues.

Suggested NACD Resources
Identify the Enemies of Effectiveness and Think Like an Activist
Investor Perspectives: Critical Issues for Board Focus in 2016

3. Mergers & Acquisitions

M&A activity reached record levels in 2015. Given this phenomenon, it’s more critical than ever that boards understand their role in M&A. We believe it boils down to readiness and oversight.

At any given time, directors may need to consider either the sale of their own company or the purchase of another company. The board must carefully weigh all opportunities to buy or sell as part of its routine corporate oversight. Be on the lookout for NACD’s new M&A Board Resource Center, which will be available later this quarter. The center will serve as a one-stop shop to help boards participate effectively in the evaluation of proposed M&A transactions.

Suggested NACD Resources
FAQs on the Role of the Board in M&A
Recorded Webinar:  The Extent of the Board’s Role in M&A

NACD Cyber Summit
On a final note, I’d like to call your attention to the 2016 NACD Cyber Summit, which will be held on June 15 in Chicago. With Congress now considering passage of a bill that would require companies to publicly identify the “cybersecurity experts” on their boards, scrutiny of the board’s role in cybersecurity oversight has never been greater. This year’s Cyber Summit will equip directors and management with the tools they need to foster cyber resiliency and confidently oversee cyber-risk management.

If you would like to receive additional resources on the three issues mentioned above or more information about the Cyber Summit, I encourage you to contact your dedicated NACD Concierge. If you have not yet had a chance to meet the concierge assigned to you, give us a call at 202-775-0509, and we’ll connect you.

Thank you for being an NACD member. I wish you a successful year ahead.

Sincerely,

Ken

Understanding the Cyber Dialogue

Cybersecurity is more than a technological issue—it’s a business issue. In a BoardVision video moderated by Judy Warner—editor-in-chief of NACD Directorship magazine—Mary Ann Cloyd, leader of PwC’s Center for Board Governance, and Zan M. Vautrinot, former commander of the Air Forces Cyber Command and current director of Symantec, Ecolab, and Parsons Corp., discuss effective cyber-risk oversight, addressing the following questions:

  • How can boards communicate with management about cyber risk?
  • How does cyber risk fit into discussions about risk appetite?

Cyber Dialogue

Here are some highlights from that conversation.

Judy Warner: For directors, I think one of the greatest challenges around the issue of cyber is how to engage in an informed conversation with management. And how do they become informed about their oversight roles as they relate to cyber?

Zan Vautrinot: One of the things that was absolutely clear about the private sector and corporate leadership is that they understood how to have a discussion about risks and strategy. The only thing different with cyber is that some of the technology and some of the solution sets are slightly different, but the conversation is the same. It is a discussion about a particular kind of risk and how it relates to the kind of business you are [in].

Warner: Mary Ann, from your perspective, how does that conversation take place, or start to take place, at the board level? And is it a conversation for the full board or a specific committee?

Mary Ann Cloyd: I guess I always say it depends. I never want to be so prescriptive as to tell somebody what they need to do because every board and every committee is different. However, I do think that, given the magnitude of how this affects so many businesses, it’s not a technology issue. It’s a business issue. So, with that, where would you oversee any other business issue at your board? And I’m guessing that a lot of it would belong at the full board, with parts of it delegated down to a committee.

Warner: The NACD recently published a handbook on cyber-risk oversight, and one of the discussions is around risk appetite and where does cyber fit into that equation today. And I know, Mary Ann, you have said we need to think of cyber as any other risk.

Cloyd: I think you bring up two interesting things. [I]n fact, we did a small publication [at PwC’s Board Leadership Center] earlier this year, and we called it “Defining Risk Appetite in Plain English.” What prompted it was I had a director come to me and he said, “Mary, we’re doing our off-site strategy session and we always talk about risk appetite. Do you have a good pre-read that I could give to the board so that they can understand what risk appetite means?” So we did this to really put in plain English, in four pages or less, what the dialog is between management and the board, and how you develop and define your risk appetite. And, to me now—as you have so beautifully put this, Suzanne—cyber is just another part of that risk discussion and how it fits into your overall strategy.

Vautrinot: Right. And if you have already had a discussion about your strategy and those things that are most important to you as a corporate entity, is it the data that is unique that you’ve collected—the information and the access to that information—that makes your corporation unique? Is it the technology or your research and development? Is it your insight into financial transaction or merger and acquisition? Is it [about] manufacturing processes or distribution processes?

Every board and every management team knows what is most important to them being successful as a corporation. It is likely that those things are the areas that [the board] would want to focus on with assessing cyber risk. If you look at that area and say this is what is most important to us as a corporation, and this is the technology that we depend on to do that activity, now I can say that is sufficient or it is insufficient relative to the amount of risk I am willing to accept in that area. There may be other areas that aren’t core to the business, and so you are willing to accept a different amount of risk or put different systems in place that kind of sandbox it—[systems] that put a fence around, or that separate or provide different controls to allow [the lower-risk] activity to run more openly, whereas [higher-risk areas are] much more controlled and much more precious.

Additional NACD resources

NACD’s Director’s Handbook Series: Cyber-Risk Oversight

NACD—Building a Relationship With the CISO

NACD—Assessing the Board’s Cybersecurity Culture

NACD—Cybersecurity Risk Oversight and Breach Response

Executive Recruiting Is Not A Lottery

 

Throughout this January in the United States, a media frenzy grew over a lottery called Powerball.  Supposedly the largest lottery prize in the world, it grew to a staggering $1.5 billion before finally being won – and shared – by three groups of people this week.

$500 million each!  Wow.  How’s that for being lucky?

Executive Recruiting is not a lotteryLuck can change everything, as it will the lives of those winners.  This also applies to business.  Luck can certainly make a difference there too.  But it is not repeatable, reliable, consistent or sustainable.

To succeed, an organization must rely on processes that have reliability.  These processes must exist throughout the organization.

Recruiting, especially executive recruiting,  is perhaps one of the most important areas requiring predictability.  An organization’s future success depends upon its ability to attract and retain individuals who will contribute in the manner that is anticipated.

This is only possible by identifying the characteristics or traits required to succeed, then pursuing these in the selection as well as the employee development process.

There are many methods available for an organization to find and attract employees.  The appropriateness of each depends upon the nature and importance of the role.  There are some roles where the path of least resistance, and cost, should be followed.  It’s an economic decision.

Other positions may be a more significant contributor to an organization’s success.  In these, value should be the deciding factor.  An ineffective hire will “cost” an organization many times the cost of their recruitment.

Retained search for years has offered organizations the ability to reduce their risk by relying on a proven process to identify and recruit key employees.  Assessments have effectively given a more in-depth understanding of individuals; seeing how well they “fit.”  Coaching has helped individuals maximize their potential.

Current studies indicate the job market continues to improve, which makes it more difficult to hire and retain those employees that organizations want.

Are you taking advantage of these proven services to help you build the organization you envision?  If not, are you waiting for luck to deliver these individuals to your front door?

That may work.  But it certainly is not predictable and, if we go by the performance of lotteries, the chances of success are very, very small.

Retained search services can help you reduce your employee risks.

 

What to Watch For in 2016

A Message from NACD’s CEO to Our Members

Each year I find myself declaring that the profession of directorship has become more challenging than it was in the previous year. I believe we’ve now reached the point where we should recognize this escalation as the status quo, not an annual anomaly. The Securities and Exchange Commission’s director qualification disclosure requirements, the advent of proxy access, and the increasingly public role of shareholder activists have contributed to a business environment in which directors’ qualifications and performance are continually scrutinized.

Kenneth Daly NACD CEONACD’s mission is to help directors lead with confidence—and to foster stakeholders’ confidence in their directors’ ability to effectively serve their companies. I’d like to highlight three critical issues that we believe directors—of all company types—should focus on during the year ahead.

1. Director Awareness

The dramatic slowdown in China’s economy, plummeting oil prices, recent terrorist activities, and the rise of the digital economy have put a fine point on the need for directors to be aware of disruptors that may cause a drastic change in sea conditions for their organizations.

No one can be expected to anticipate every potential disruption. (Who could have seen Uber idling around the corner?) But foresight comes down to one deceptively simple practice: asking the right questions. Are board members exploring the possible impacts of a terrorist act on the company’s supply chain, investigating their organization’s vulnerability to a cyber attack, or considering new competitors that can bring products to market faster than ever before and with nominal investment?  Throughout 2016 our NACD Directorship 2020 initiative will continue to focus on disruptive forces, putting a spotlight on the issues that may affect your companies in the years to come.

Suggested NACD Resources:
Environmental and Innovative Disruption: What Directors Need to Know
Leveraging Social and Demographic Trends

2. Shareholder Activism

It goes without saying that activist investors have gotten our attention. A record-setting 355 activist campaigns were announced in 2015, including 33 against Fortune 500 companies. Last year was also a record year in terms of activist campaigns resulting in board seats—127 resulted in at least one board seat for the activist or the activist’s appointee. Our own annual survey of public-company directors found that 20 percent of respondents’ boards were approached by an activist investor in the past year. But nearly half of respondents reported that they are unprepared for an activist challenge.

Activists aren’t practicing black magic; they are performing effective due diligence and smart analytics on their holdings. Boards need to think like activists and anticipate the issues these investors may raise. Do your company’s metrics fall outside industry norms? Does your board composition have any perceived weaknesses? Do you engage with management about the assumptions that undergird your company’s strategy? In 2016, NACD will continue to provide resources that can help your boards to anticipate—and respond to—emerging issues.

Suggested NACD Resources
Identify the Enemies of Effectiveness and Think Like an Activist
Investor Perspectives: Critical Issues for Board Focus in 2016

3. Mergers & Acquisitions

M&A activity reached record levels in 2015. Given this phenomenon, it’s more critical than ever that boards understand their role in M&A. We believe it boils down to readiness and oversight.

At any given time, directors may need to consider either the sale of their own company or the purchase of another company. The board must carefully weigh all opportunities to buy or sell as part of its routine corporate oversight. Be on the lookout for NACD’s new M&A Board Resource Center, which will be available later this quarter. The center will serve as a one-stop shop to help boards participate effectively in the evaluation of proposed M&A transactions.

Suggested NACD Resources
FAQs on the Role of the Board in M&A
Recorded Webinar:  The Extent of the Board’s Role in M&A

NACD Cyber Summit
On a final note, I’d like to call your attention to the 2016 NACD Cyber Summit, which will be held on June 15 in Chicago. With Congress now considering passage of a bill that would require companies to publicly identify the “cybersecurity experts” on their boards, scrutiny of the board’s role in cybersecurity oversight has never been greater. This year’s Cyber Summit will equip directors and management with the tools they need to foster cyber resiliency and confidently oversee cyber-risk management.

If you would like to receive additional resources on the three issues mentioned above or more information about the Cyber Summit, I encourage you to contact your dedicated NACD Concierge. If you have not yet had a chance to meet the concierge assigned to you, give us a call at 202-775-0509, and we’ll connect you.

Thank you for being an NACD member. I wish you a successful year ahead.

Sincerely,

Ken

Ability to Learn: How Good Will You Be Tomorrow?

The leading predictor of career success is not education completed but ability to learn.

There was a time when who you know was more important than what you know when you are looking for a job.  But those days are largely gone.

Now the emphasis has shifted again.  Today’s forward thinking in the recruiting world is looking beyond what you know to find out how you know it.

Your ability to learn is the keyEducation levels will continue to be a rapid and valuable guide to assess candidate capabilities but, like the caveat in a stock offering, past achievement is no guarantee of future performance.  In fact, the substance of the knowledge gained pre-work is of declining value as time goes by and as the workplace becomes more specialized.

A formal education may not be a reliable predictor of success in a given job.  As the challenges of hiring exceptional employees mount, the promise inherent in an acquired level of education is coming under much closer scrutiny.

What many recruiters look for now is a link between what a high value candidate knows now and how able he or she will be to remain of high value going forward.

The leading predictor of career success is not education completed but ability to learn.

 

First you face the challenge

Almost any field of business today requires new and intense learning on the job.  Technology is a favorite culprit, leading to innovation and new processes.  But technology doesn’t often hand over new solutions. Before we get there, it has usually created problems.

It falls to gifted members of the workforce who can spot opportunities, put diverse elements together and create the competitive advantage the technological advance hinted at.

In this environment, companies such as Google or Tesla have become “serial innovators”, maintaining huge leads in business through the ability to innovate.   This doesn’t mean a handful of key players.  Business innovation is a team sport running the gamut of the firm’s problem solving, development, production, sales and distribution capabilities.

The team’s speed needs to match or exceed the change taking place in the given field.  Break that down further and the speed of the team is that of its slowest member.

 

Capability falls off in 18 months

This doesn’t happen just to the Googles and the Teslas.  Work studies suggest that many jobs now continue to evolve so rapidly that the ability to perform well in them degrades in only 18 months.  A Korn Ferry study found a direct link between an individual’s learning ability and the promotions received by that person over 10 years.

The elephant in the recruiter’s room of course lies in assessing learning ability.  There are many accepted ways it can be measured but to do so in a time-efficient, practical manner is challenging.

Dr. John Sullivan is a prominent commentator and author of several books on talent management. He has identified 14 ways to assess continuous learning ability — eight during the interview and six outside of the interview.

You can read them here in a recent issue of ERE Media’s Recruiting Intelligence

 

 

The Cornerstone Eagle Jan 2016

THE CORNERSTONE EAGLE is the newsletter for senior executives, friends and partners of the Cornerstone International Group around the world. The Eagle is majestic, free and towers above all else when gracefully gliding the currents in the air. The Cornerstone International Group likewise feels close affinity with the Eagle, in professionalism in our practice, honesty and integrity in all our interactions, and making positive changes in our work and processes to improve and create added value for our clients and candidates.

Download The Cornerstone Eagle – January

Recruiting Content: the Long Way to the Best Result

If you have not come across the words “Content Marketing”, enjoy the journey to Pluto.

If you Google the phrase, you will get 383 million results. If you are a member of the Association of National Advertisers (ANA) representing 10,000 brands, you have just declared this the 2015 “Marketing Word of the Year”

Recruiting Content infographicContent Marketing is a big deal.  Small wonder, then, that it no longer sells just products and services, but people.   Recruiting content is the new buzz-phrase in the hiring business.

We looked at “why” in my last post.  Decision-making by job candidates has become a lot more complex, involving lifestyle choice to a far greater degree than a decade ago.  Good candidates want to know a lot more about the working environment and the values of the hiring.

In filling this gap, recruiting content covers a broad spectrum of needs.

At entry level, content that gives more detail of the job not only serves the candidate but pays back in time saved at the hiring end when a significant percentage of potentially eligible candidates drop out.

At a senior level, the driving force is reversed.  The hiring company is not that concerned about the job detail – unless it is quite unique – but is VERY concerned about making the company attractive to the right candidates.

 

You would like it here

A CFO is unlikely to be motivated by a detailed job description.  The main challenge for the hirer is to differentiate the company so as to attract the CFO to begin with.  This leads to putting carefully structured, motivating content in front of the target group.

Not every company thinks they need to do this.  Some of the biggest companies feel they are already well-known.

“Most companies are under the false assumption that just because they know what their company and logo stand for, everyone else does, too,” writes James Ellis, director of inbound marketing at TMP, a global recruitment advertising agency.

“But as a loyal shopper at Target or Walmart, I really only know the retail experience — not the employee experience. Companies seem to assume that because I spend time and money within their stores, I must have a positive association with their employer brand. But that’s a faulty assumption.”

These companies need to tell the story of what working at the company is like, what the office is like, what the job is like, and what the career path is like.

“That’s the information a job seeker in consideration of changing his or her life needs to hear.”

 

It’s not about the job

Recruiting through the use of inbound marketing strategies does not focus on a specific job opening.  The strategic focus is on building an Employer Brand that will be attractive to the type of candidate the company wants to attract when it does have an opening.

In this respect, recruiting content is operating at two levels, like thermal streams in the ocean.  Content may explain the attractions of a specific job, usually as long-copy ads in career media.  The longer term task is creating the image of the company, its values and its processes in such a manner that, when a candidate finally does come across a suitable opportunity, he or she is motivated to know more.

There is a third level.  Articles about the company itself will not necessarily be read by passives who are not contemplating a move at that time.  So the content needs to be more embracing, more on industry issues or generally positive trends.

Understood.  But where do you place this kind of content?

 

It’s an SEO World

You already know the answer.  The same process that swallows up significant amounts of your website budget applies her also – search engine marketing.

Your recruiting content is coded in the same way to end up in front of the type of people you want to appeal to by selecting appropriate social media channels.

This is a lot of work but it is rapidly becoming a necessary consideration in any recruiting strategy aimed at the higher employment levels.

Is it worth the effort?  Back to James Ellis, whose firm completed a study of 300 career sites.  This study showed the following impacts of recruiting content on candidates.

Entry-level job seekers were 30% less likely to apply after seeing content.  They self-select out and no-one wastes their time.

For the experienced veterans – 10+ years of experience – content made them 289% more likely to apply.

That could be called a win-win.

 

 

 

 

 

 

 

 

Understanding the Cyber Dialogue

Cybersecurity is more than a technological issue—it’s a business issue. In a BoardVision video moderated by Judy Warner—editor-in-chief of NACD Directorship magazine—Mary Ann Cloyd, former leader of PwC’s Center for Board Governance, and Zan M. Vautrinot, former commander of the Air Forces Cyber Command and current director of Symantec, Ecolab, and Parsons Corp., discuss effective cyber-risk oversight, addressing the following questions:

  • How can boards communicate with management about cyber risk?
  • How does cyber risk fit into discussions about risk appetite?

Cyber Dialogue

Here are some highlights from that conversation.

Judy Warner: For directors, I think one of the greatest challenges around the issue of cyber is how to engage in an informed conversation with management. And how do they become informed about their oversight roles as they relate to cyber?

Zan Vautrinot: One of the things that was absolutely clear about the private sector and corporate leadership is that they understood how to have a discussion about risks and strategy. The only thing different with cyber is that some of the technology and some of the solution sets are slightly different, but the conversation is the same. It is a discussion about a particular kind of risk and how it relates to the kind of business you are [in].

Warner: Mary Ann, from your perspective, how does that conversation take place, or start to take place, at the board level? And is it a conversation for the full board or a specific committee?

Mary Ann Cloyd: I guess I always say it depends. I never want to be so prescriptive as to tell somebody what they need to do because every board and every committee is different. However, I do think that, given the magnitude of how this affects so many businesses, it’s not a technology issue. It’s a business issue. So, with that, where would you oversee any other business issue at your board? And I’m guessing that a lot of it would belong at the full board, with parts of it delegated down to a committee.

Warner: The NACD recently published a handbook on cyber-risk oversight, and one of the discussions is around risk appetite and where does cyber fit into that equation today. And I know, Mary Ann, you have said we need to think of cyber as any other risk.

Cloyd: I think you bring up two interesting things. [I]n fact, we did a small publication [at PwC’s Board Leadership Center] earlier this year, and we called it “Defining Risk Appetite in Plain English.” What prompted it was I had a director come to me and he said, “Mary, we’re doing our off-site strategy session and we always talk about risk appetite. Do you have a good pre-read that I could give to the board so that they can understand what risk appetite means?” So we did this to really put in plain English, in four pages or less, what the dialog is between management and the board, and how you develop and define your risk appetite. And, to me now—as you have so beautifully put this, Suzanne—cyber is just another part of that risk discussion and how it fits into your overall strategy.

Vautrinot: Right. And if you have already had a discussion about your strategy and those things that are most important to you as a corporate entity, is it the data that is unique that you’ve collected—the information and the access to that information—that makes your corporation unique? Is it the technology or your research and development? Is it your insight into financial transaction or merger and acquisition? Is it [about] manufacturing processes or distribution processes?

Every board and every management team knows what is most important to them being successful as a corporation. It is likely that those things are the areas that [the board] would want to focus on with assessing cyber risk. If you look at that area and say this is what is most important to us as a corporation, and this is the technology that we depend on to do that activity, now I can say that is sufficient or it is insufficient relative to the amount of risk I am willing to accept in that area. There may be other areas that aren’t core to the business, and so you are willing to accept a different amount of risk or put different systems in place that kind of sandbox it—[systems] that put a fence around, or that separate or provide different controls to allow [the lower-risk] activity to run more openly, whereas [higher-risk areas are] much more controlled and much more precious.

Additional NACD resources

NACD’s Director’s Handbook Series: Cyber-Risk Oversight

NACD—Building a Relationship With the CISO

NACD—Assessing the Board’s Cybersecurity Culture

NACD—Cybersecurity Risk Oversight and Breach Response