Apple Needs a Boardroom Shakeup: Five Considerations for Tim Cook

This article is by Mark Rogers, the founder and chief executive of BoardProspects.com.

The significance of last week’s report that Apple ’s chief executive Tim Cook is “actively seeking new directors” to add to the company’s board cannot be overstated. This is the moment when Cook can finally place his stamp on the technology giant, more than three years after Steve Jobs passed the torch to him before his death in 2011. But this is about more than Tim Cook, too. It is about the future of the company, because if ever there was a need for a boardroom shakeup, there is at Apple.

As Apple’s founder and chief visionary, Jobs viewed boards as an obstacle to innovation. Thus he surrounded himself in the boardroom with a brilliant but arguably passive group of directors who provided him with the leeway he felt he needed to build the company that Apple became. The problem, of course, is that Cook adopted Jobs’ board, and such a strategy is no longer sufficient. Apple needs a board that will challenge Cook and his management team to remain competitive in a growing international market.

The question now facing Apple’s shareholders is whether Cook can embrace innovation in the boardroom the way Apple does in its products. Almost any board embarking on a director search can attest that there are no perfect candidates. A “strong business background” is almost always a given, but it is virtually impossible to check off all of the desired proficiencies on a nominating committee’s wish list. Nevertheless, if I were an Apple shareholder, I would want Tim Cook to address these five needs in his director search:

1)  Female candidates:  Andrea Jung, the former CEO of Avon Products , is the only woman or minority group member on Apple’s board of directors. (In fact, she and Angela Ahrendts, Apple’s retail chief, are the only women in the company's top echelon.) Women represent more than $20 trillion in annual consumer spending. As one of the largest retailers in the world, Apple needs more than a one-eighth representation of women in the boardroom.

2)  Selecting outside the directors' club: Many board searches begin with the premise that the only acceptable candidates are people already on other boards. There is an extraordinary amount of talent outside this directors' club, and Apple would be well-served by reaching out to it.

3)  International expertise: International sales accounted for 66% of Apple’s $45.6 billion second quarter revenue this year. More than a third of Apple’s 80,000 employees worldwide are based outside the U.S. Given these figures, shouldn’t Apple have at least one board member from outside the country? Twitter understood the importance of international expertise in the boardroom when it recruited Marjorie Scardino to its board late last year. The former CEO of London-based Pearson, Scardino is critical element in Twitter’s plan for international growth over the coming years.

4)  Technology background: Other than in Cook himself, there is a stunning absence of deep technology expertise among Apple’s current board members. One may argue that Apple’s management team has all the knowledge necessary, but a great board should not abdicate to management in the company’s industry strength. Walt Disney Company has tremendous technology assets throughout its management team, but that didn't stop it from recruiting tech superstar Jack Dorsey (of Twitter and Square fame) for its board earlier this year.

5)  Youth: The average age of Apple’s directors is 63. The company doesn't need  a 21-year-old college student in the boardroom, but given its consumer base, one would think that the company would like to recruit a board member in his or her forties (or, God forbid, thirties?).

What the above considerations really represent is diversity, in particular, diversity of perspective. Diversity in the boardroom should reflect the breadth of both the consumer base and future growth. Although it's not now that way at Apple, Tim Cook and the board's chairman, Arthur Levinson, have an opportunity to make it so with their pending director appointments.

Cook’s legacy, and the future of Apple, may just hang in the balance.