Despite their strategic expertise, marketers are significantly underrepresented on the boards of the world’s largest companies, writes Cos Mingedes, Co-Founder & Head of Effectiveness at True.

CMOs consider their role as crucial in driving business growth and that their understanding of consumer behaviour, market trends, and go-to-market strategies make them invaluable assets to any organisation. But a study by the Marketing Science Institute revealed that only 2.6% of board members across the S&P 1500 have marketing experience. This glaring disparity raises questions about the perception of marketers and the value placed on their expertise in the boardroom.

Furthermore, this lack of representation makes it more challenging to communicate and scale understanding around how marketing can contribute to business objectives and drive value. This often results in marketing being looked upon as a questionable cost in the P&L – judged on quarterly sales results rather than an investment into long-term growth.

It puts pressure on marketers to demonstrate immediate returns, to the detriment of building long-term brand health and value. It focuses on tactics that generate short-term ROI rather than strategies that generate larger profit returns over a sustained period. To put it simply, boards are pushing CMOs towards an efficiency mindset, rather than an effectiveness mindset.

The Harvard Business Review cites one issue as a lack of understanding from CEOs about what CMOs do, and CMOs reporting that they’re not given enough say in company strategy, instead relegated to overseeing the communications strategy. This has led to the short tenure of CMOs in global brands as unfair expectations are rarely met.

Value reinvention: Cross-functional shifts in perception

There's a prevailing perception that marketing is primarily a tactical exercise, confined to the realm of advertising and promotional campaigns. This narrow view overlooks the profound impact that true marketing can have on company value, driving business positioning, strategy formulation, and implementation across various facets of the business.

To address this misconception, it's crucial that CMOs use their deep understanding of customer needs and translate this insight into tangible growth opportunities – demonstrating their ability to not only engage in creative marketing campaigns but also contribute to broader business strategy development, including product development, pricing strategies, and overall market positioning. This involves cultivating strong cross-functional relationships with sales, operations, product development, finance teams and the board.

In doing so, CMOs can begin to elevate marketing to a position of strategic prominence, demonstrating its ability to shape the entire business strategy and drive long-term value creation.

If you don’t like what’s being said, change the conversation

Most critically, CMOs need to work closely with their boards to ensure that marketing initiatives are aligned with the company's overall strategy and objectives. This starts with gaining a deep understanding of those objectives and articulating how and where marketing can drive value over the next three to five years. By focusing on the long-term, CMOs can move away from discussing short-term tactics and instead focus on strategic goals that will be highly valued by the board.

From there, it’s critical to learn how to translate initiatives and results into the language of finance, clearly demonstrating how marketing has made tangible contributions to the overarching business objectives. It is also essential to establish accountability to targets, implementing robust measurement approaches that provide empirical evidence, using value-based metrics, that enable CMOs to establish direct links between marketing efforts and business growth.

This builds a long-term, strategic, data-driven point of view on marketing that is aligned with the finance team – with a shared and common language around success between the boardroom and the marketing department.

Getting to VALUE

Fran Cassidy, a leading researcher in marketing effectiveness, developed The VALUE Framework which provides a structured approach for CMOs to develop the skills and fluency necessary for greater partnership with finance and the board. It comprises five key areas:

  1. Understanding VALUE Creation: Grasping the tangible value marketing delivers to the organisation and its customers, over the long and short term, beyond just generating leads and sales.
  2. Accepting ACCOUNTABILITY: Taking ownership of marketing metrics and demonstrating accountability of value creation to the organisation.
  3. Using the LANGUAGE of value creation: Communicating effectively using business terminology, understanding key financial concepts, and demonstrating financial literacy.
  4. Scaling UNDERSTANDING: Fostering a company-wide understanding of how marketing contributes to overall business goals and value creation, involving collaboration with finance teams and the board.
  5. Adopting an EVIDENCE-Based Mindset: Using empirical evidence and value-based metrics to drive decision-making, beyond relying solely on digital metrics and short-term sales data.

In conclusion, while CMOs play a crucial role in driving business growth, their expertise is often overlooked in the boardroom.

To address this misconception, CMOs must shift their mindset from short-term tactics to long-term value creation, effectively communicate their impact using financial language, and foster a company-wide understanding of marketing's contribution to business success.

By adopting the VALUE Framework and aligning marketing initiatives with the company's overall strategy, CMOs can elevate their role in the boardroom, demonstrating the true value of marketing in driving sustainable growth.