Archive for the ‘Director Education’ Category

Leading with Honor

September 29th, 2015 | By

The 2015 NACD Global Board Leaders’ Summit officially opened Sunday evening with the bang of drums and the bagpipes of the St. Andrew’s Society of Washington, D.C., a local Scottish heritage association. Their performance was followed by an interactive video experience that challenged the audience to question the borders of the screen. Each of these sensory experiences underlined the theme of the year, Beyond Borders: Leadership Evolved. The opening night keynote speakers–NACD Chair Dr. Reatha Clark King, and philosopher and author, Kwame Anthony Appiah–explored how directors should weather the evolution of the boardroom.

Dr. Reatha Clark King

King is a fan of challenges. A seasoned director herself who values the good businesses can do in the world, King centered her message on all the work that boards have done to better the world around us—and the work left to do. “We have been successfully adjusting the trajectory of governance systems and have made improvements, but we still have much to do,” said King. “The board’s agenda gets longer. We offer no encouragement that the agenda will get shorter. Instead we prepare ourselves for the greater demand.”

Kwame Anthony Appiah

One of the demands King identified was the need for directors to hold fervently to core beliefs. One among the many she cited was accountability: “I am a student of the word ‘accountability,’ and it looms large in my mind for directors to understand and embrace it.” King asked the audience to also embrace leadership in challenging times in spite of the many chances to falter. Among the recommended ways to lead with strength through governance challenges were the concepts of embracing broader perspectives, finding the courage to do what’s right, and to be brave enough to change if needed.

King’s suggestions for leadership to the audience of more than 1,200 were strengthened by Kwame Anthony Appiah’s discussion on honor. Appiah is author of The Honor Code, a best-selling book that examines four points in history where honor outweighed other forces to catalyze social change for the greater good. Appiah distilled his observations on honor into applications for the boardroom and professional practice as a whole.

At the core of his message was that honor will trump money, regulation, and even the coercion of law to guide a person’s moral compass and that only honor holds up in the face of the greatest ethical challenges that inevitably arise.

Identifying Obstacles to Board Diversity

September 29th, 2015 | By

The final session of the Diversity Symposium at NACD’s 2015 Global Board Leaders’ Summit focused on the Report of the NACD Blue Ribbon Commission on the Diverse Board and how directors can implement recommendations from that report in their own boardrooms. Kapila Kapur Anand, a partner at KPMG LLP and the firm’s national partner-in-charge of Public Policy Business Initiatives, led the discussion with panelists that included Anthony K. Anderson, retired Ernst & Young LLP vice chair, executive board member, and Midwest and Pacific Southwest managing partner; The Hon. Cari M. Dominguez, a director at ManpowerGroup, Triple-S Management, Calvert SAGE Fund, and NACD; and Karen B. Greenbaum, president and CEO of the Association of Executive Search Consultants.

The Diverse Board: Moving from Interest to Action

As the Blue Ribbon Commission that produced this groundbreaking 2012 report observed:

[A] company’s ability to remain competitive will rely on its understanding of global markets, changing demographics, and customer expectations. Diversity is a business imperative, not just a social issue. The new business landscape will require boards to cast a wider net to find the very best talent available. As a natural corollary, the board’s mix of gender, ethnicity, and experiences will likely increase.

Dominguez noted that structural, social, and habitual barriers may prevent boards from becoming more diverse, and she offered this key advice: Don’t rely solely on the company’s CEO to lead this conversation. It’s the responsibility of every director to move the discussion forward.

So why aren’t boards as diverse as they could be? Greenbaum addressed this question by referring to data she collected via a survey of both boards and search firms. Her findings surfaced five issues:

  1. Candidate pool. Boards contended that it was difficult to find diverse candidates. Horn countered this claim by asserting that a failure to find qualified candidates is more a function of boards not searching correctly. Boards should demand that search firms provide a diverse list of candidates. Conversely, search firms take their cue from boards and expect them to be vocal about the importance of having a diverse candidate pool.
  2. Term limits. A lack of term limits results in a situation in which boards cannot be routinely refreshed with new directors. If term limits are restricting opportunities to bring on new talent, consider expanding the board.
  3. Experience: Boards resist adding members who are not current CEOs or CFOs. Boards need to be open to first-timers and should develop strong mentoring programs to bring newly minted directors into the fold.
  4. Succession planning: Build a pipeline of diverse talent in your own company so that these leaders can serve not only in your boardroom but also in those of other organizations.
  5. Status quo. Boards can become complacent about how they operate, especially when they feel no pressure from shareholders or other stakeholders to change.

“All of us must be conscious that this is a leadership issue,” Anderson said. “If the leadership of a company doesn’t believe in diversity initiatives, the ability to make much happen is grossly inhibited.” Companies with a diversity strategy that touches on leadership, employment, and procurement are reinforcing the importance of diversity as part of company culture, Anderson added..

Creating change takes time, effort, and formal processes. Putting diversity on the agenda may require a shift in thinking and habits, but, as all of the panelists agreed, diversity is a business imperative that will only grow in importance over the coming years.

How to Make a 21st-Century Board

September 28th, 2015 | By

How will boards find the next generation of talent—directors who will be able to maintain their companies’ competitive edge in a global marketplace? This was the question raised in the third session of the Diversity Symposium at this year’s NACD Global Board Leaders’ Summit, and it was addressed by a panel composed of Lt. Gen. (Ret.) Michael Rochelle, founder, president, and CEO of MDR Strategies LLC; Pablo Schneider, CEO of The Wider Net, a firm dedicated to advancing diversity in top leadership roles; and Caroline Tsay, vice president and general manager at Hewlett-Packard Co. and director of Rosetta Stone Inc. and Travelzoo. The panel was moderated by Andrea Hoffman, founder and CEO of Culture Shift Labs, and the discussion broke down the talent search process into three parts:

  • identifying opportunities for increasing diversity,
  • analyzing the impact of force multipliers in the boardroom, and
  • locating these wellsprings of new talent.

Building the 21st Century Board

Schneider observed that the most promising opportunities for increasing boardroom diversity arise where the board’s biggest knowledge and talent gaps exist. Because demographics and technological innovations are transforming companies everywhere, boards must assess not only a candidate’s skill sets and experience but also whether he or she has the mindset to oversee those transformations. Rochelle added that boards must look at disorder and disruption in order to ensure that director talents correspond to those forces. Tsay advised boards to analyze the skills of prospective directors in terms of their alignment with the company’s overall strategy.

Discussion then moved to the force-multiplier effect—i.e., how having subject-matter experts dramatically increases the board’s effectiveness by providing diversity of thought and cultural perspectives on the profiles of these candidates. Rochelle again brought up the issues of disorder and disruption, asserting that it will be impossible for boards to manage these forces if they continue to rely on traditional approaches. He also noted that an outsider’s view is critical, both because it prompts the board and the executive team to be more diligent in how they analyze day-to-day business and because it provides new insights into potential problem areas.

Tsay echoed this point, offering the example of a Rosetta Stone director who is also the CEO of a media company and who established an advisory consumer focus committee on the board in order to acquire a more granular understanding of the company’s customers. Force-multiplier talents can help boards to rethink the tools they use to reach consumers and how the board can gain an end-to-end view of the industry. “There are opportunities to get candidates with expertise, but how do you best leverage them?” Tsay asked.

Finally, the panelists discussed two key questions: who are the people best qualified to raise the company’s profile, and where can one locate these wellsprings of talent? On this score all agreed that networking is critical. By attending corporate, industry, and/or director education events, current board members will be able to meet and foster professional relationships with potential candidates.