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Donald Pratt |
The Kansas City board of the American Century funds is working on its succession planning, according to Donald Pratt, chairman. Due to the increased emphasis on diversity and the aging of the directors, the board is reworking its criteria for prospective members even though it does not yet have an immediate need. "Our board is growing older and we have a number of people who are approaching retirement age in the next three to four years so we need to develop our list of prospects," said Pratt. The recommended retirement age is 72.
"We've done some more thinking about the demographics of the shareholder base," he added. "We thought we were in good shape but as we examined [this] we saw that we could probably go up another female director if we can find a good candidate." Currently, two of the eight directors on the board are women.
The board is also putting more emphasis on finding a director with senior management operating experience. "We feel that people who have worked at the senior management and operations level have a better grasp on what needs to be addressed," Pratt said. In the past, the board had placed a high priority on finding directors with financial expertise but with three former CPAs the board is relaxing that criterion.
Although some boards may look to use outside recruiters (see related story, page 6), Pratt said the board has been very successful in identifying prospects through existing director recommendations. "We have become a bit more sensitive to wanting to have had some exposure and knowledge of an individual's character before we place them on the board," said Pratt. "We've tended to lean more toward people that the board members have either met, worked with, are on another board with or have come into contact with in an operating environment." This highlights another priority, which is placing a higher emphasis on the character of the prospects rather than on their experience and/or academic background, noted Pratt.