Wanted: Suitable board directors to help firms navigate global crises

livemint.com:

Mint. Heidrick & Struggles said three in five respondents were seeking new directors either to overhaul their board or as they needed to hire a new director in 12–18 months. “About three quarters of the respondents cite the retirement of a director as the reason they are undergoing a refresh, and one in two aim to infuse new skill-sets into their boards," stated the study.

The hunt is proving tougher than expected also because of global factors that are weighing more heavily on Indian companies. “Indian businesses are not isolated anymore and global crises like wars are impacting supply chains. Companies need experts who can offer strategies and guidance against these events, which is a rare skill-set," Suresh Raina, partner at Heidrick & Struggles India, told Mint.

Executive search firms have sought out expatriates living in India to join some of these boards, but such candidates typically have high demands. Potential “senior directors ask for $150,000–$200,000 ( ₹1.25–1.7 crore per annum) to be part of a board," said Raina. Commissions of independent directors on the boards of Nifty50 companies have doubled over the previous five fiscal years, according to a study by consulting firm Deloitte.

An independent director’s commission is largely dependent on a mix of fees for attending board meetings, called sitting fees, and commissions linked to a company’s performance. While sitting fees are capped at ₹1 lakh, commissions are expected to increase. Currently, about 84% of a director’s payments is in the form of commissions, with sitting fees accounting for the rest.