1、Board MonitorMexico 2022In 2021,companies listed on the BMV showed a preference for first-time public board members as well as active executives.CEO&Board PracticeThanks to the following Heidrick&Struggles colleagues for their contributions to this report:Juan Ignacio PerezMexico CityLewis AdamsMexi

2、co CityLydia PerazaMexico CityAbout the reportThis report is part of Heidrick&Struggles long-standing study of trends in board composition in countries around the world.Produced by our CEO&Board Practice,these reports track and analyze trends in nonexecutive director appointments to the boards of th

3、e largest publicly listed companies in Australia(ASX 200),Belgium(BEL 20),Brazil(BOVESPA),Canada(TSX 60),Denmark(OMX Copenhagen 25),Finland(OMX Helsinki 25),France(CAC 40),Germany(DAX and MDAX),Hong Kong(Hang Seng),Ireland(ISEQ),Italy(FTSE MIB),Mexico(BMV IPC),the Netherlands(AEX),New Zealand(NZX 10

4、),Norway(OBX),Portugal(PSI 20),Saudi Arabia(Tadawul),Singapore(STI 30),South Africa(JSE Top 40),Spain(IBEX 35),Sweden(OMX 30),Switzerland(SMI Expanded),the United Arab Emirates(ADX and DFM),the United Kingdom(FTSE 350),and the United States(Fortune 500).Information about executives is gathered from

5、publicly available sources,BoardEx,and a Heidrick&Struggles proprietary database.Introduction4How are boards stepping up to meet the moment and prepare for an uncertain,and more demanding,future?9Looking forward 15The terms of engagement between companies and the community-at-large have changed 7Sna

6、pshot of 2021 findings6Welcome to Board Monitor Mexico 2022HEIDRICK&STRUGGLES3 IntroductionAs society and business are reconciling the events of the past two years and a new corporate license to operate is taking shape,boards are facing a marked need to understand what changes they must make in orde

7、r to successfully lead their organizations through both the near-and long-term futures.In most countries,there is a very clear expectation that companies take a stand on social and political issues,the war in Ukraine being a clear example in which many stakeholders expected companies to sacrifice th

8、eir profit and operations for the greater good.In Mexico,companies are expected to put their communities first and protect them from the combined impacts of the COVID-19 pandemic and increased cost of living caused by the war in Ukraine.And,in almost every country,stakeholders now expect and require

9、 companies act in a sustainable manner.Boards are facing a marked need to understand what changes they must make in order to successfully lead their organizations through both the near-and long-term futures.BOARD MONITOR MEXICO 20224 So,have boards moved the dial when it comes to changing their comp

10、osition to tackle these new expectations and mitigate the risk of losing their license to operate?In Mexico:While there has been progress in broadening the spectrum of experience around boardroom tables in BMV IPC companiesparticularly by adding the expertise of sitting executives and those who have

11、 not served on boards beforeeach company needs to make sure it is not only prepared for todays challenges but is able to anticipate what type of directors it needs in order to be future-proof.282021The number of appointments to BMV IPC companies boards held steady in 2021 compared to the previous ye

12、ar:there were 28 appointments in 2021 compared to 27 in 2020.272020Key findingsThe share of seats allocated to women increased slightly,to 36%up from 33%.A larger share of seats went to directors who are active rather than retired:96%compared to 74%in 2020.96%The share of directors without previous

13、public board experience more than doubled,increasing from 7%to 18%.HEIDRICK&STRUGGLES5 Snapshot of 2021 findingsInternational experienceFinancial risk/complianceSustainabilityDE&ISocial media/digitalCybersecurityOther previous experience(%)3221141140Experience(%)First-time board member:Previous boar

14、d experience:1882C-level experience(%)CEOCFOCOODeputy CEOOther C-level experience(overall combined)145071811Distribution of industry experience,by board industry(%)Note:Numbers may not sum to 100%,because of rounding.ConsumerIndustrialBusiness servicesFinancial servicesOtherConsumerFinancial service

15、sIndustrialTechnology&telecoms163716Technology&telecoms82338151517341724717633Nationality(%)National:Non-natioanl:6832New seats filledCurrent or former CFO experienceCurrent or former CEO experienceActive vs.retired executives(%)Gender balance(%)Average age285350%14%9664436RetiredWomenActiveMen32439

16、6BOARD MONITOR MEXICO 20226 Nice-to-haves are becoming mission critical for corporate governance(and leadership)There is a new license to operate,and a new conception of the corporation is developing as a result.Sustainability,DE&I,wellness,and ethics were peripheral issues that,in time and in many

17、countries,became nice-to-haves built in to create competitive advantages;today,they are table stakes for global corporations thanks to increased pressure from a wide spectrum of stakeholders and increasing regulatory demands.Environmental,social,and governance(ESG)issues,for example,are becoming a c

18、ore business pillar and increasingly instrumental in corporate access to capital in many markets.Sustainability policies,in particular a companys response to climate change,are becoming increasingly regulated around the globe.Though Mexico has a number of laws that govern ESG,including the General L

19、aw on Climate Change,there isnt yet a regulatory requirement for sustainability disclosure.But public companies listed on the BMV are required to include in their annual reports their environmental policies,certificates and recognitions,environmental projects,carbon emissions,and information on thei

20、r corporate governance including board appointment processes,composition,and gender representation.1 At the moment,Mexico ranks 74th in the Sustainable Development Index developed by Bertelsmann Stiftung,the UNs Sustainable Development Solutions Network,and Cambridge University Press,which shows tha

21、t there is much progress to be made and suggests that government and businesses have to work together to promote sustainable growth in the country.2The terms of engagement between companies and the community-at-large have changed ESG issues,for example,are becoming a core business pillar and increas

22、ingly instrumental in corporate access to capital.HEIDRICK&STRUGGLES7 1 Carlos Escoto,Mariana Herrero,Marianela Romero,and Lorena Kiehnle Barocio,“Setting the Scene:Sources and Overview,”Environment,Social,and Governance Law Mexico 2022,ICLG,December 13,2022,.2 Jeffrey D.Sachs,Guillaume Lafortune,Ch

23、ristian Kroll,Grayson Fuller,and Finn Woelm,Sustainable Development Report 2022,Bertelsmann Stiftung,Cambridge University Press,and the United Nations Sustainable Development Solutions Network,June 2,2022,sdgindex.org.Another important driver in Mexican business is digitization.An earlier McKinsey a

24、nalysis showed that significantly improving Mexicos digital maturity could boost the countrys GDP by 15%,3 and boards should be looking for ways to take advantage of those opportunities.Digital maturity will also improve companies ability to attract more talent by better supporting a hybrid way of w

25、orking.DE&I is a continuous work in progress.Fairness and equity are increasingly important to stakeholders.Despite seeing gender parity in the political arena50%of Mexicos congress representatives are womenbusiness is trailing behind on gender balance,with womens representation on the boards of the

26、 countrys leading companies sitting at 10%.DE&I is a continuous work in progress.Fairness and equity are increasingly important to stakeholders.BOARD MONITOR MEXICO 20228 3 Max Cesar,Alberto Chaia,Andre de Oliveira Vaz,Gonzalo Garcia-Muoz,and Philipp Haugwitz,“How Mexico can become Latin Americas di

27、gital-government powerhouse,”McKinsey Digital,November 1,2018,.They are infusing new perspectives The number of appointments to BMV IPC companies boards held steady in 2021 compared to the previous year,but we saw a significant shift towards directors who are active rather than retired,from 74%to 96

28、%.How are boards stepping up to meet the moment and prepare for an uncertain,and more demanding,future?Number of appointments,2020 vs.2021272020282021Percent active executives,2020 vs.2021202020217496HEIDRICK&STRUGGLES9 The share of directors without previous public-board experience more than double

29、d in 2021 compared to 2020,increasing from 7%to 18%.However,the share is still comparatively small compared with most of the other 24 countries we track around the world.Eighty percent of first-time directors appointed in 2021 are women,which contributed to the progress on gender balance.First-time

30、directors are more likely to be non-national compared to their more experienced peers:60%compared to 26%,and 11 years younger on average.In terms of experience,they have no CEO or deputy CEO experience,while 61%of the experienced board members appointed in 2021 had a CEO role and 22%had a deputy CEO

31、 position during their careers.BOARD MONITOR MEXICO 202210 CEO and CFO experience over time:Men vs.women,2020 vs.2021(%)Professional experience We saw a drop in the share of seats going to directors with CEO and CFO experience compared to 2020,from 55%to 48%.Its notable that we saw a steep decrease

32、in the share of seats going to directors with CFO experience.CEO experienceCFO experience202020216722440561240320202021Other experience,2020 vs.2021(%)Financial risk/complianceDigitalMen44194521SustainabilityCybersecurityWomen07414Looking at other professional experience,increasing shares of directo

33、r seats went to executives with sustainability and financial risk and compliance experience,while the share going to directors with cybersecurity experience decreased.HEIDRICK&STRUGGLES11 The share of seats going to directors with cross-sector experience increased.Most sectors brought on directors f

34、rom a mix of sectors,with directors with financial services backgrounds seeing high demand across sectors,perhaps to complement the directors with financial risk and compliance experience.Same-industry and cross-industry experience,2020 vs.2021(%)OverallConsumerFinancial servicesIndustrialTechnology

35、&TelecomsOverallConsumerFinancial servicesIndustrialTechnology&TelecomsCross-industry experience,by board industry 7185558350575982736757676420202021Same-industry experience,by board industry2020202110010010000100 100Distribution of industry experience,by board industry(%)ConsumerIndustrialBusiness

36、servicesFinancial servicesOtherConsumerFinancial servicesIndustrialTechnology&telecoms163716Technology&telecoms82338151517341724717633324396BOARD MONITOR MEXICO 202212 20202021New female appointees,2020 vs.2021(%)3336Gender balance We saw a small uptick in the share of seats allocated to women:36%in

37、 2021 compared to 33%in 2020.There are great sector variations among the share of seats that went to women,from 76%in technology and telecoms to 17%in financial services.Gender of new appointees,by industry,2021(%)OverallConsumerFinancial servicesIndustrialTechnology&telecoms25758371172964366436MenW

38、omenHEIDRICK&STRUGGLES13 Age diversityThe average age of newly appointed directors to BMV IPC boards dropped significantly in 2021,to 53 compared to 59.This most significant factor is the larger share of seats going to women.Also,in 2021,29%of seats went to directors under 45,which is one of the hig

39、hest percentages we have seen among the countries we tracked in 2021.Age distribution,2021(%)Under 454549.95054.95559.96064.96569.970 or older2910141414101017Women less often have CEO,deputy CEO,or CFO experience,and significantly less often have previous experience on public boards.They are more of

40、ten non-national and are,on average,eight years younger than their male peers.How the profiles of men and women compare(%)MenWomenShare of seats ExperienceCEO CFO Deputy CEOOther C-level Financial risk/compliance Social media/digital Sustainability International Previous public board DiversityNon-na

41、tional Average age 64561728101704656000942863344364010106040BOARD MONITOR MEXICO 202214 Looking forward As the contract between companies and society is changing,it is necessary for boards to be fit for purpose today and be able to manage future unexpected yet inevitable crises.Companies require a n

42、ewer,bolder type of leadership that is focused on organizational purpose,factors in the new demands from their workforce,and has“doing good while doing well”as a mantra.Boards need to build agility to both deal with unexpected events and achieve a certain level of foresight,and to integrate fresh pe

43、rspectives into their leadership that will complement the experience of more seasoned business leaders who have seen different economic cycles and crises unfolding.In addition,leadership capabilities such as purpose,empathy,and inclusion are taking equal importance to any areas of hard expertise.So,

44、what are best-in-class boards doing?They are:Actively seeking new directors whose backgrounds combine a mix of traditional expertise,(such as CEO or CFO)with knowledge that is newer on boards skills matrix,such as digital,sustainability,or cybersecurity,or experience in different industries As many

45、Mexican companies are going through extensive digitization processes,its concerning that the new share of directors with digital skills has remained low at 4%.Bolstering their sustainability acumen.Thought we saw some progress in the share of seats going to directors with sustainability expertise in

46、 2021,more needs to be done given the increasing sense of urgency in addressing sustainability.There is a clear need to increase the level of fluency boards have on the topic:a survey Heidrick&Struggles conducted in collaboration with INSEAD of board members around the world found that that 85%of re

47、spondents believed that the level of overall climate knowledge on their boards needed to increase.4 Yet current board succession processes dont call for progress on this front,the survey shows:69%of board members said that climate change knowledge is not included in their boards competency matrix.HE

48、IDRICK&STRUGGLES15 4 Changing the Climate in the Boardroom,Heidrick&Struggles and the INSEAD Corporate Governance Centre,.That said,there is no single prescription for board composition.Each company is in a different stage of maturity,in different industries and locations,and pursuing unique strateg

49、ies,and while some have weathered the past couple of years successfully,others have more to rebuild.Each board should ensure its refreshment strategy reflects the organizational purpose and goals for the long term and prioritize efforts to add fresh perspectives where they will make the most differe

50、nce.Seeking new members who have the ability to take on a leadership role,either that of a chair,senior independent director,or committee leader.The chair is central to determining what skills,backgrounds,and expertise are needed on a board,as well as to shaping a board culture that ensures all dire

51、ctors,old and new,can contribute effectively.And,for all board leadership roles,nontraditional leadership capabilities come to the fore:boards should seek people who are good listeners and relationship builders,people who can lead through influence and connect with the organizational purpose.5 This

52、matters more than ever because its crucial,especially now,for chairs and directors to be able to collaborate across cultural or political differences as well as differences in expertise and backgroundnot by ignoring those differences but by using them as assets to solve problems.Thinking of successi

53、on planning as an ongoing exercise rather than an exercise undertaken in reaction to an annual deadline.A significant part of this process is proactively cultivating potential board members who can meet anticipated needs across different time horizons and strategic scenarios.This reduces risk and bu

54、ilds confidence that the organization will be led well whatever happens.Another important element is regularly assessing the performance of boards and board members to make sure that the company has the most effective team around the table.Creating a space for temporary seats at the table or bringin

55、g in voices from outside as a sounding board when voices beyond those in the boardroom need to be heard.These range from ad hoc committees to observers,advisors,or shadow boards.Staying tightly focused on diversity.Best-in-class boards are building their networks and improving their outreach to pote

56、ntial directors.Gender representation is still a challenge on Mexican boards,and more needs to be done.BOARD MONITOR MEXICO 202216 5 Alice Breeden and Bonnie W.Gwin,“The chair imperative:A new mandate for leading in a new world,”Heidrick&Struggles,.CEO&Board PracticeHeidrick&Struggles CEO&Board Prac

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58、their leadership assets.This ranges from the acquisition of talent through executive search to providing counsel in areas that include succession planning,executive and board assessment,and board effectiveness reviews.Our CEO&Board Practice leverages our most accomplished search and leadership consu

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