Companies acting irresponsibly by not letting marketing into c-suite

Consumer facing companies that fail to have marketing representation on their boards are acting “irresponsibly” and risk damaging future growth prospects, according to one of the world’s biggest executive search agencies.

Diageo

Report cites Diageo as an example of a company that offers marketing a voice in the boardroom.

A report by Norman Broadbent, which head hunts executive and non-executive directors for the UK’s top companies, found marketing under-represented on the boards of FTSE 350 firms with only 50 non-executive directors having a background in marketing. Finance representation, by contrast, has grown in recent years as companies look to protect shareholders’ investment in the current economic environment by seeking greater scrutiny of spending.

Changes in consumer habits because of technological advances have heightened the need for business to consumer companies to increase the representation of marketing on their boards, the report adds.

“In a world characterised by lightning-fast technological change, where relationships with the consumer have undergone a seismic shift almost unimaginable only five years ago and that might have been considered completely fantastical fifteen years ago, the absence of a function that is almost defined by its knowledge of, and relationship with, the consumer seems at best irrational. At its worst, it seems irresponsible”, it continues.

The report cites Diageo and Unilever as examples of companies that offer marketing a voice in the boardroom. It concedes they, as FMCG companies, are “preaching to the converted” but insists their actions should be noted by all B2C firms.

It continues : “Why should it be different for retailers, pharmaceutical companies, media and construction companies? They too, after all, are concerned with the consumer. Furthermore, in some of these sectors, the world has moved on. Consumer habits have changed beyond recognition yet company structures and board make-up have lagged behind.

“Non-executives who champion the consumer voice in the boardroom have a firm belief that the company that listens to its consumers and stays close will deliver growth, and the company that delivers growth delivers success to its shareholders.”

Marketing directors wishing to grow the influence of their function in the boardroom should be “more proactive” and “press for access” to board members to present their case. “Internally they should ensure they are positioned with the board as a business person who works in marketing rather than a marketer who works in business,” the report says.

Additionally, marketers need to gain more commercial experience in their organisation, “bring science to their art”, and show they can demonstrate what companies require of non-executive directors – knowledge of remuneration, pensions, regulatory and financial matters, the report says.

The recommendations to hasten advancement echo those offered by a panel of former marketers who have stepped up to the c-suite speaking last week at the ISBA annual conference.

ISBA and The Marketing Academy are trying to address under-representation by launching a fellowship mentoring scheme designed to equip senior marketers for the boardroom.

Readers' comments (2)

  • This is something that has concerned me for may years. It has been a trend not for just the past 5 years or so, but has been a traditional problem with UK business in particular and also in many other countries around the world.

    Part of the problem is the training given to marketing people as well as the training given to MBAs. The training is almost mutually exclusive, with MBAs taught basic very old fashioned, traditional marketing principles under the basic premise that marketing is purely a junior departmental function, and not to be taken too seriously - unlike financial functions which are the only serious considerations in business. Conversely, in marketing degrees and CIM qualifications, it would appear that very little consideration is given to financial functions. You only have to look at the prospectuses of the various universities offering courses to see this.

    Perhaps this article - http://www.analysemarkets.co.uk/#/typical-md-background/4573711737
    will explain in more detail why some modern boards can't cope with market problems; for example, BP, Morrisons, the banks and many other boards which find themselves in trouble, none of which have any marketing representation on the board.

    If you are out of touch with your markets, you can't make good financial investment decisions. It's really very simple.

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  • I don't agree that universities are not preparing managers properly from a marketing perspective. At my university, the MBA strategic marketing class does consider marketing at the c-suite level explicitly and we have incorporated, since 2006, a module on marketing finance on our MSc Strategic Marketing programme. Personally, I think part of the problem lies in the fact that marketing is only just beginning to prove its worth in the investment in people and budgets. When we can clearly account for investments in marketing and show how they bring results, we will start to see more marketers on companies' boards.That said, I think things are moving in this direction, and so companies should be thinking about marketing representation on the board if they have not got it now, particularly in a slow-growth environment like we're in, when the customers' perceptions of value completely change.

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