What corporate boards will focus on in 2014January 7, 2014: 9:40 AM ET
More boards are willing to address egregious CEO performance issues than in previous years and, more than ever before, directors are willing to speak out in favor of chair and CEO separation.
FORTUNE -- If you are among the throngs seeking a corporate board seat, knowing what's on the agenda of corporate boards in 2014 may be top of mind. But if you aren't, you may be interested for trickle down reasons.
Now, I'm not referring to trickle-down economics, which when measured over the course of a year has less volume than Pollyanna's tears. No, what I mean is trickle down influence, which your company's board has hopefully placed on your CEO's -- and thus your managers' -- list of priorities.
Boards have gained strength this year, as they have over the last decade, and they have more influence on your company's strategy than they ever did before. They don't see their role as just bobbing their heads to management's plan. They expect to test assumptions -- and to ask questions -- no longer just in polite conversation name only.
Unlike 2013, going into 2014, boards aren't as afraid of the economy now. What scares them more is whether your CEO and managers really have what it takes to pull off growth or innovation strategies. (They are unlikely, however, to straight out tell them that.)
Today, more board members want to know what you and your colleagues think. At the best-run companies, they attend your company's sales conferences or invite you or your managers to their board dinners. The best boards are inviting open dialogue with those up and down the chain. That's because they know the best way to figure out if your CEO is on track is to understand what employees think.
Boards in 2014 have on their minds the kinds of issues you read about every day. Think risks like cyber-security (and the recent Target (TGT) and Yahoo (YHOO) debacles). Think CEO compensation -- which board members will admit continues to flummox them. Think other stakeholders, something which going into 2013 concerned them a lot more than ever before.
If your company is doing worse than its peers, or if it has extra, unused cash (which itself can be a particular kind of performance issue), or if it using out-of-step practices, shareholders may occupy the board members' minds. But while more directors are willing to communicate with shareholders, not every board is all that concerned about shareholder activism.
More boards are willing to address egregious CEO performance issues than in previous years and, more than ever before, directors are willing to speak out in favor of chair and CEO separation. (Fewer are beholden to the CEO for their seat.) Still, most are still getting their sea legs as far as proactive CEO succession is concerned. That will be a 2014 priority for many boards.
Just about every director is concerned with board succession. Who to hire, and diversifying the board, occupies some attention, but a bigger deal is figuring out who should go. Having to ask someone to step down can be a source of deep pain for many directors.
Many boards do not find themselves able to willingly give straight feedback to underperforming members of their team -- or establish processes other than age or tenure or change of work status as mechanisms to ask their fellows to leave. So this will remain an ongoing struggle for 2014. At underperforming companies, activists may heighten the urgency by suggesting alternative members to the board.
Just like shareholders do, you probably recognize that it's not just the current profit and loss or balance sheet that matters to the future of a company. Management matters. And for a long time, boards haven't. But they are starting to.
As the economy grows, one of the best things you can do for yourself if you are going to work for a company is to research the backgrounds of the top managers. (Look at the number of megabanks with people in top spots who failed to disclose the nature of the products they sold or the components of their income streams.)
With the increasing importance of boards, researching the backgrounds of the people hiring your CEO can also be fruitful. (Many boards have come under scrutiny for the qualifications and backgrounds of their members.) Most public companies list the names of the board directors on their website -- and search engines work well to find out more about them. If you can't find them there, the SEC's website of public company filings is easy to use. Just put in the company's stock ticker symbol and search for the latest def 14a filing.
Reviewing who's who can be interesting. Active shareholders scrutinize who they are. Who is on the board is a top issue for boards today, and it will be for 2014 and beyond.
Eleanor Bloxham is CEO of The Value Alliance and Corporate Governance Alliance (http://thevaluealliance.com), a board education and advisory firm.