Here’s what differentiates the top 25 corporate boards from their counterparts

May 12, 2023, 11:51 AM UTC
Board members in discussion at conference table in office
The top boards prioritize a respectful culture.
Getty Images

Diverse, always evolving, and technologically aware. These are the three nonnegotiable traits of top-performing, future-ready directors, according to François Locoh-Donou, CEO of F5, which topped this year’s Modern Board 25 ranking. 

The Seattle-based cybersecurity firm may be unfamiliar to many consumers, but its software runs in the background of everyday banking, shopping, and online booking apps, says Locoh-Donou, a director of the $8 billion company. The CEO shares credit with F5’s other directors for the company’s recent reinvention as a digital rather than hardware player. His fellow board members, he says, are a diverse and highly trusted group who have advised him through major investment decisions and game-changing acquisitions.  

Fortune launched the Modern Board 25 ranking last year to begin capturing how boards are changing to become more like the team at F5 and less like the boards of yore: insidery, disengaged, and cloaked in mystery.

The list uses information gathered by Diligent and ESG data from Refinitiv to measure boards’ financial performance, independence, diversity, and more. No single sector dominates the 2023 list, and the largest firms do not steal the show. Fortune 500 giants like Amazon (No. 17), Walgreens (No. 10), and Microsoft (No. 21) sit next to smaller, lesser-known companies such as F5 and American Water Works (No. 14). 

Here are some highlights from our results:

Highest overall score: F5
Best ESG score: Microsoft
Top sector performance score: Schlumberger
Most gender diversity: Citigroup (though it’s a racial diversity laggard) 
Highest board independence: Citigroup
Most multigenerational board: Danaher
Company with the youngest board member: Gen Digital (age 43)

Companies may be facing a polycrisis, but Modern Board 25 directors offer remarkably similar answers when asked about the most pressing challenges. They didn’t mention problems like inflation or geopolitical conflicts but instead zeroed in on staying competitive long-term. 

That was true of Bristol Myers Squibb (No. 9), where independent lead director Ted Samuels told Fortune, “The biggest risk we face is ensuring that we build a sustainable engine of innovation.” The full board and its science and technology committee spend large amounts of time reviewing R&D initiatives and investments, he explained, because “discovering new molecules or protocols is what delivers value for all stakeholders over the long run.”  

While board chemistry is hard to measure, it was a differentiator that directors highlighted in conversations. When Gen Digital directors Sherrese Smith, a managing partner at Paul Hasting, and Emily Heath, a former chief trust and security officer for Docusign, attended a joint Zoom to speak with me, Smith said she partly agreed to the interview because Heath is one of her favorite people. (It showed.) Both women praised their board colleagues for the free-flowing exchange of ideas and healthy disagreements. Likewise, in her description of what makes the Ralph Lauren board so effective, director Valerie Jarrett, CEO of the Obama Foundation, referred to the trickle-down effect of authenticity, sincerity, and curiosity from the fashion retailer’s iconic founder and from the CEO Patrice Louvet.

Marie Myers, CFO at HP and an independent director at F5, echoed Locoh-Donou’s characterization of that company’s board, saying directors have cultivated camaraderie inside and outside of formal meetings. That has allowed the board to jump into action when required, “organically” forming subcommittees, for example, to work relentlessly in the face of complex challenges or existential threats. “I think that’s when a board’s strength really gets tested,” she told me. 

Check out the complete Modern Board 25 ranking here.

Lila MacLellan


Curiosity is an essential element of a functioning board.”

—Valerie Jarrett, CEO of the Obama Foundation and Ralph Lauren director, tells Fortune

On the Agenda

👓 Surveys show that boards are concerned about sustainability, but do they have the skills to act on their worries? This GreenBiz column offers actionable advice to help close the gap between intention and ability.

📹 “The future is not on your face.” In this TED Talk, former Apple designer Imran Chaudhri says invisible computers, not VR goggles, will soon shape our world. Demo included. 

📖  A group of business school researchers divined four facts about the motivation and expectations attached to ESG investing for a new working paper. One spoiler: People who choose ESG investments for ethical reasons also invest the most in them.

In Brief

- International Shareholder Services walked back a recommendation that JPMorgan Chase shareholders reject CEO Jamie Dimon’s latest $34.5 million pay package. The proxy advisory company said it had relied on the wrong data.

- Microsoft, which reported nearly $53 billion in revenue last quarter, will not offer pay raises to salaried employees this year.

- U.K. employers are wooing women into the labor market by providing benefits such as time off after a lost pregnancy, menopause leave, and IVF coverage.

- Starbucks’ new CEO has made his first big change to impact customers: No more free customizations of its fruity Refresher drinks. The CEO also dropped hints about strategic moves still to come.

- Elon Musk, CEO and lone director at Twitter, is executing his succession plan. He said he plans to transition into a CTO role and appoint a woman (still unnamed) as chief executive.

Editor’s Pick 

In a wide-ranging interview, Fortune’s Phil Wahba spoke to Ann Mukherjee, CEO of liquor company Pernod Ricard North America, about her role as a chief executive who also has a boss, why she hates liquor stores, and her personal history with the company’s products. “Alcohol has played a central role in the most tragic events in her life,” Wahba writes. “When she was a teen, a drunk driver killed her mother. A few years before that, a drunk man sexually assaulted her.”

Here’s one of Mukherjee’s responses:

“I’ve worked in salt (PepsiCo), I’ve worked in sugar (Kraft Heinz), and I’m now working in alcohol. Here’s the thing: If this were a world that only serviced needs and not wants, it would be a tough world to live in. My entire career has been about helping people enjoy life but doing it in a responsible way, with moderation. Because of my background, this was a personal cause, and I felt the universe was trying to tell me something. Losing my mother was the greatest loss of my life, and no one, and I mean no one, should have to go through that. That’s why I’m here. It’s important to advocate for the responsible use of products.”

Read the entire interview here, and have a great weekend. 

This is the web version of The Modern Board, a newsletter focusing on mastering the new rules of corporate leadership. Sign up to get it delivered free to your inbox.

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