Who has the most innovative board in America?

Cybersecurity company F5 has been declared to have the “most modern board in corporate America” by the New York-based publication Fortune. 

The company sits atop a “top-25” list that also contains the likes of S&P Global, HP and Walgreens. 

It’s based on criteria many experts consider “modern” measures of good corporate governance – chiefly diversity, integrity and expertise. 

Let’s dive into the details:

F5 sits at the top. Behind them, in order, are chemical company Linde, S&P Global, software company Gen Digital, and oil field services giant Baker Hughes. 

You can see further rankings details here.

The list specifically targets S&P 500 companies. In 2022, Microsoft, HP, Walgreens, Intel and 3M filled the top five spots.

Two things:

• Directors’ personal backgrounds and areas of expertise.
• How those directors feed into corporate America’s efforts to reflect modern corporate governance principles. 

What do we mean by “modern corporate governance principles”? We mean sustainability, ESG, and social issues such as diversity and support. 

Not every company puts these things at the front of their strategy; some don’t even want to know about them. That doesn’t hold back the tide, though. 

These principles are still vastly increasing trends across the board, and Fortune embraces this.

It has singled out the company’s efforts in the following areas:

• Diversity. 7 of the company’s 11 directors are from an underrepresented background, it says. 
• Communication. Directors are in touch around twice a week instead of the more traditional approach of meeting once a quarter. 
• Emphasis on humility. The magazine noted how big egos don’t hamper F5’s debates in the boardroom. Ideas have respect, and decisions enjoy healthy discussion beforehand.

Fortune developed this list alongside SaaS solutions provider Diligent. The criteria touch on many issues that experts now consider essential ingredients of a modern, capable board of directors. 

These criteria separate the old “yes-men, rubber-stamp” approach of previous decades from the modern principles of engagement and integrity. 

In full, they are:

• The expertise of board members. What skills are around the table?
• The independence of board members. Can directors give honest assessments of a company’s performance and strategy?
• The diversity of board members. This is a common issue in modern governance and politics. Some governments, like the EU, have even introduced laws to boost participation from underrepresented backgrounds. 
• Financial performance. A staple metric, but primarily looked at through the lens of sustainability strategy nowadays. 
• Vulnerability to activism. Activists are everywhere, and they target big market players with impressive results. If a company is on an activist radar, it’s a sign that it doesn’t align well with Fortune-style criteria. 

The above principles were merged with corporate ESG scores to produce a final result.

Very.

Why? Because investors make their decisions along the same lines. Even the most prominent players in the American market, like BlackRock, conform to this way of thinking. 

They want to see a company approach strategy with a well-rounded mindset incorporating all of the above, and they look for boards that support this mindset because they know that corporate culture comes from the top.