Should CMOs be more prevalent on retail boards?

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Jun 10, 2019
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MarketingCharts staff

Through a special arrangement, presented here for discussion is a summary of articles from MarketingCharts, which provides up-to-the-minute data and research to marketers.

Chief marketing officers’ roles have changed in scope and importance in recent years as they have taken on the responsibilities of customer experience, data analytics and brand. Very few, however, hold seats as directors on company boards.

A new study from Spencer Stuart finds that of the thousands of seats available for Fortune 1000 companies in the U.S. only 26 are currently occupied by individuals holding the title of CMO or its equivalent. The survey doesn’t include former marketers who may have moved into broader executive roles.

An accompanying survey of more than 250 senior marketing executives found about three-quarters (73 percent) expecting that marketers will become more prevalent on boards in the coming years.

Asked in what areas marketers might bring the most value to the board, the top answer was consumer/client insights, 42 percent, closely followed by digital technologies (AI, social media, etc.), 40 percent.

The findings come as other reports show marketing’s influence is increasing. A SAS-sponsored survey of 560 business leaders, for instance, found 36 percent indicating that responsibility for the customer experience sits with the CMO, versus a quarter at the CEO’s feet.

The Spencer Stuart study found that marketers may be more popular in the boardroom as driving organic growth increases in importance for many companies. More expertise in “modern marketing” skills, including digital transformation, social media, customer relationship management and loyalty, mobile platforms and omnichannel retail, is also being sought. Insights from marketers may also prove beneficial because they tend to work across functions and areas such as strategy are becoming increasingly important.

Obstacles that keep marketing leaders from wider representation on boards include the fact that only a small number of seats become available on boards every year, a bias toward replace exiting board members with individuals with similar expertise and a tendency to prioritize leaders who have prior CEO or governance experience.

As more marketers become CEOs, more board members with marketing backgrounds could follow, according to the study. An analysis of the largest 233 publicly traded firms from Notre Dame’s Mendoza College of Business finds some 25 percent of CEOs have marketing experience.

DISCUSSION QUESTIONS: Has it become more important for individuals with marketing expertise to join boards? What other areas of expertise may become more critical for retail company boardrooms?

Please practice The RetailWire Golden Rule when submitting your comments.
Braintrust
"CMOs should be bringing the customer to the table with them — should be the defender of doing what’s best for the customer."
"Unequivocally, yes. At the heart of retail is the consumer, and nobody is better aligned (and incented) to understand that consumer than the CMO."
"No longer can board members slide by with their skin-deep, secondary exposure to the practice of marketing."

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15 Comments on "Should CMOs be more prevalent on retail boards?"


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David Weinand
BrainTrust

As the survey stated — individuals that have expertise in understanding and reacting to consumer behavior is critical. Therefore, they have an important role in the boardroom. This isn’t just retail either. Healthcare, consumer finance, consumer products — all of these industries touch the consumer and an executive that truly understands how to interact with them both physically and digitally can add a lot of value in the boardroom.

Nikki Baird
BrainTrust

I think it’s more than just customer insights that are at play here. Retailers talk a big talk about being “customer centric” but I find way too many retailers who don’t know what that really means and who don’t have strong enough voices at the top to push on making customer centricity a reality. CMOs should be bringing the customer to the table with them — should be the defender of doing what’s best for the customer (vs. just what’s best for the company’s short term profits). And, by the way, that alone is not enough — let’s add the CIO while we’re at it, to be a voice for digitizing the business and embracing digital transformation. Because you need both of those things to win in retail today.

Ian Percy
BrainTrust

Right with you Nikki. Let’s join forces and promote board involvement from marketing, technology and HR!

Bethany Allee
BrainTrust

Nikki is right on the money. Having marketers as voices of customer advocacy on a board is a long-term play that will pay off. Own the customer’s heart and mind, and you will also own their wallet.

Ian Percy
BrainTrust

Some excellent points in this far too brief article. First is the problem that so many boards are made up of people with the same way of thinking. I’ve done a lot of work with boards, especially hospital ones, and they are made up of some the smartest people on the planet. But the moment they sit around the big mahogany table with the leather placemats, the whole becomes significantly less than the sum of the parts. Sometimes dramatically so.

A huge yes to marketing-oriented minds being on the Board! They can influence the “customer experience” strategy to great advantage; perhaps much more than the titans of industry can.

For most of my career, I’ve pushed for much the same thinking about involving Human Resource professionals as part of the Senior Leadership team and as members of the Board. They are the ones who can most influence the “employee experience” strategy.

Unfortunately, most Boards specialize in “spreadsheet experience” at the expense of both employee and customer.

Evan Snively
BrainTrust

Well said Ian!

(*millennial me inserts clapping emoji here*)

Rich Kizer
BrainTrust

I have always wondered how the boards of directors rarely consider, or give a very large platform to the wisdom and insight of a person who literally spends their life understanding markets, consumer behaviors, and how to promote and sell. I always refer to the announced “car of the future,” the Edsel. I don’t think many board members of today want to be responsible for that kind of experience. Yet, we can all recant incredible retail failure stories that were misled by bad decisions. So, please include the CMOs and their staff’s brilliance.

Brandon Rael
BrainTrust

In the age of the customer, retail executive boards should reflect this paradigm shift accordingly. The Chief Marketing Officer (CMO) has emerged, especially with the customers owning the shopping journey, and how they engage, shop, and ultimately transact with brands. Previously, the merchandising and IT executives dominated retail executive roles, however, we are now seeing how important the CMO has become.

The CMO role is essentially the leadership role that is the liaison between the physical, digital and technology worlds. Retailers have committed to improving the customer experience, and driving greater personalization. Marketing as we knew it has evolved to track and meet the customers needs, as well as engage on social channels.

In short, we should expect the CMOs to be included on corporate executive boards in the near future.

Fredrik Carlegren
BrainTrust

Unequivocally, yes. At the heart of retail is the consumer, and nobody is better aligned (and incented) to understand that consumer than the CMO. This is even more critical for retailers that engage consumers across multiple channels including stores, online, and mobile given the CMO’s intense focus on ensuring brand consistency across touchpoints. In return, the CMO must remain data-driven. Where single-view of customer is an important driver for business success, I expect we’ll see continued growth in influence of the CMO.

Jeff Sward
BrainTrust

Marketing is effectively communicating a product and a brand promise to the customer. To be effective, marketing also has to be a listening and learning tool and operate in partnership with the pure product side of the business. Sounds like a board seat to me.

Joel Goldstein
BrainTrust

As the internet becomes the destination for research before shopping (the days of going into a store to ask the clerk’s opinion of which product you should buy goes by the wayside), the consumer will continue to seek advice online and the marketing arm of any retailer will become more and more important to those destination purchases. The difference between going to Academy Sports vs. Dick’s when buying that next kayak could be how they educate the consumer online before they considered walking into the store.

Evan Snively
BrainTrust

I would expect most people in this community have a vested interest in the answer being YES give marketing a bigger seat at the table — and rightfully so. But the timing is also right, as the world of what is possible via marketing and expectations of consumers with how they interact with brands has drastically changed over the past 10 years. No longer can board members slide by with their skin-deep, secondary exposure to the practice of marketing. Trying to direct a business today without the consultation of someone who is intimately connected with a deep understanding of this ever-changing world is a recipe for a fast and furious fall from grace.

Ricardo Belmar
BrainTrust

Understanding customer insight data is key. Data is driving the behavior behind more and more actions (if not all!) at most companies in most industries. This will only increase, and as it does, having the expertise to interpret the data and associated insight and map it into actions to drive customer adoption will become essential to the success of every business, not just in retail.

Shikha Jain
BrainTrust

The shift to having CMOs on boards seems so obvious, but the stats in the article are surprising. It also highlights the fundamental shift in business operations and go-to-market strategies. For far too long, boards have been focused on the “cost” or the “operations” and “general corporate strategy” side of things vs. honing in on the top-line growth side of things. Not saying that they don’t but there is still an imbalance that needs correction over the years.

Ralph Jacobson
BrainTrust

One of my favorite old adages: “If you aren’t speaking with the customer, you’d better be speaking with someone who is.” The CMO had better be in touch with the customer, so the board better be asking them for input.

wpDiscuz
Braintrust
"CMOs should be bringing the customer to the table with them — should be the defender of doing what’s best for the customer."
"Unequivocally, yes. At the heart of retail is the consumer, and nobody is better aligned (and incented) to understand that consumer than the CMO."
"No longer can board members slide by with their skin-deep, secondary exposure to the practice of marketing."

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