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Alice Korngold Headshot

How to Double Your Company's Profits: Begin by Refreshing Your Board of Directors

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What CEO of a multinational corporation doesn't want to grow the company by tens or hundreds of billions of dollars? Given today's extraordinary challenges, that's quite possible. Because the threats of wealth inequality, climate change, and terrorism present opportunities for worldwide companies to grow to new heights, and profiting, by creating global peace and prosperity for all people. Some leading companies are already beginning to find solutions to such challenges as I show in A Better World, Inc.: How Companies Profit by Solving Global Problems...Where Governments Cannot (Palgrave Macmillan, 2014).

Yet companies will never truly achieve their greatest potential until they do one important thing differently: reimagine and transform the composition of their boards of directors. Transforming boards so that each and every board director has valuable professional expertise as well as a background and perspective that is relevant to today's and tomorrow's global marketplace. Only then will companies be able to envision and achieve their greatest potential -- strategically and financially. Until then, companies will continue to view the world and their possibilities with blinders.

The widening gap between rich and poor, and rising unemployment among those who are uneducated for today's more technical jobs, are already creating tensions in some of the world's major cities and most vulnerable regions. These threats will continue to grow as more people are dislocated by the effects of climate change and as vital natural resources become more scarce. Many noted scholars and journalists attribute violence in the Middle East and other geopolitically significant areas to droughts that have driven farmers to cities where there are no jobs. Within the next few decades, 70 percent of the world's population will live in mega-cities where poverty and unemployment will grow exponentially unless major changes are made.

Although the globe faces dire threats, an era of peace and prosperity remains possible. As shown in A Better World, Inc., a number of companies are beginning to lead the way -- and profiting -- in solving vital issues, such as poverty, climate change, education, health care, human rights, and the preservation of natural resources. Companies benefit by mitigating risks, reducing costs, and growing their value by offering innovative products and services. Companies alone have the vast financial, human, and technology resources, as well as the global footprint and market forces to achieve transformational change. And consumers, employees, and investors are demanding both the profits and the better world, which go hand-in-hand.

In the next two decades, the greatest opportunities for businesses to profit are in emerging markets, where three billion people will enter the middle class. In Africa alone, consumer-facing industries will grow by $400 billion. Women also represent an important emerging market for companies, as they will control close to 75 percent of discretionary spending worldwide in the next five years.

S&P 500 Boards are comprised of 82 percent men, who are an average age of 63, older in fact than the average age 10 years ago. (At 63, board members grew up when school materials were mimeographed; most were first exposed to the Web at the age of 40.) Yet directors of non-U.S. origin account for only 8.6 percent of directors on the boards of the top 200 S&P 500 companies; they are primarily from the U.K., India, Canada, France and Germany. Among the top 200 S&P 500 companies, minorities account for 15 percent of all directors (which includes 1.9 percent of Asian descent). Women account for just under 18 percent of the total number of directors, with the average number of women per board at 1.9.

Imagine instead a board comprised of 10.7 people (the average board size) where directors of a variety of ages bring the relevant expertise and leadership experience that is needed, and have grown up in various regions of the world, in a variety of socio-economic conditions. Such a group, some with academic credentials or particular subject mastery, others having built and led innovative ventures, climbed the ranks of multinational corporations throughout the world, having life experiences in emerging markets, and playing and working with the latest technologies from the time they could crawl, can truly envision what's possible and also know what questions to ask management.

With such boards of directors, multinational corporations will finally unleash their greatest potential, attaining exponential profits while achieving peace and prosperity.