Three Reasons Why Marketers Deserve Boardroom Seats
The Case for Marketers in the Boardroom
Boards of directors are coming under increasing pressure from an array of stakeholders questioning their understanding of market dynamics, customers, centers of influence, competitive threats, and the customer experience.
Board members increasingly need the types of market intelligence, insights, and innovation that marketing can deliver so they can:
- Monitor changes in market sentiment, customer tastes, and buying behavior;
- Anticipate threats from disruptive innovations, competitors and activist investors;
- Leverage new digital, social, and mobile platforms and business innovations to drive topline growth.
Until now, marketing has been historically under-represented and undervalued in the boardroom. According to industry research, of all the directors serving on Fortune 1000 company boards, only 0.39 percent are CMOs (that is less than 40).
Progressive boards can gain a competitive edge and mitigate risks by bringing more CMOs into the board room. Communication and transparency are paramount to board engagement with all their stakeholders. Having a colleague with the breadth and depth in the intricacies of consumer insights, public relations, and reputation management in a digital universe is a differentiator. Proxy statements have become important pieces of marketing communications as companies strive to make their positions clearly understood and supported by investors. Qualified marketers at the board level provide a company with the strategic resources it requires for any situation.
Three reasons why marketing skills and capabilities are needed in the board room
First, the lens from which the board views its company and the greater economy has changed completely. The continued emergence of new digital channels represents one change. Renewed focus on the customer experience plays another critical role. At the crossroad of digital evolution, data, customer experience and the capability of communicating this to internal and external constituents is the CMO. According to Mark Phibbs, vice president of EMEA marketing for Adobe Systems Europe, “2015 was the year CMOs got serious about data and technology, increasing their influence in the business.” Phibbs continued, “This will allow us to be increasingly seen as directors of customers and revenue, rather than the director of spending.”
Second, the board’s short and long-term decision-making requires the CMO’s counsel and input. The broader strategic challenges involving the company’s competition, innovation, and core customers are tackled better when the marketing officer contributes. CMO influence at the board level is only becoming more essential. As business strategist Martin Roll said, “He or she is no longer an executioner of the board or CEO’s decisions. The CMO should not only influence decision-making but should also put relevant issues and agendas in front of the board to consider. These should be in line and reflect the customer-centric philosophy and vision that the CMO is implementing within the organization.”
Third, the board and CEO can be well served by the CMO with regard to staying relevant about consumer preferences. Few have a better feel for the end-user/consumer pulse than the marketing executive. Done well, the CMO then takes a vital role in guiding corporate strategy.
What marketers can do to get a seat at the table?
Marketers can advance their chances of contributing in the Boardroom by focusing more on performance, demonstrating the value of the digital and analytics capabilities they bring to the table, and learn what it takes to be on a board.
1. Be a performance marketer. First, to be noticed by recruiters and the nominating committees that employ them, a CMO should be a true performance marketer. “To be considered for board roles, you need to be known for delivering measurable results and adding strategic value to the organizations where you have worked”. Cammie Dunaway, former CMO of Yahoo! and a director for several boards. This touches everything from eCommerce and geo-tracking to data analytics and content optimization. Key to success in the boardroom is having a strategic mindset and the ability to execute that strategy with proven results. This is because marketers are under-valued by the CEO relative to financial and technology peers, and not perceived as a primary engine of growth relative to sales. For example, according to research by the Fournaise Marketing Group Global Marketing Effectiveness Program 90% of CEOs trust and value the opinion and work of CFOs and CIOs. Only 20% of CEOs feel the same way about the CMO.
2. Demonstrate the value of digital and analytics skills and capabilities marketing brings to the table. “Top marketing professionals offer boards a refined perspective on how customer acquisition is fueled by marrying technology and data science. They are also often a voice for creating long-term brand value by consistently delivering on a core promise to customers.” According to Matthew Anderson, the CMO of Roku. “It is helpful to have a unique point of difference, like being an expert in digital transformation or having deep industry expertise,” Cammie Dunaway continues, “Recommendations are most likely to come from your CEO or from senior executives in your network, so building a reputation as a leader is critical.”
3. Learn what it takes to be on a board. According to Mike Hughes, director general of the Incorporated Society of British Advertisers “Many marketers fail to appreciate the importance of learning the language of the boardroom and even more fail to take the time to expand their knowledge of other functions in the business. In general, marketers have tended to focus on progression within their own department in the shortest possible time. In contrast, progressive marketers see the value in taking assignments outside of their function to broaden their knowledge and enhance their prospects of being invited into the boardroom.”
At the end of the day, these guiding points for both directors and CMOs are fundamentally all about a new learning experience. For board members, the experience is looking at marketing not through the lens of traditional marketing, but the marketing of today that is so much more, including data analytics, ROI, and results. For CMOs, the experience is more self-reflective, aimed at learning what it takes to get into the boardroom. For many directors, there is no such thing as a bad board experience; rather, they are all learning experiences. We hope that CMOs and all board directors learn to feel the same.