Archive for the ‘Leadership’ Category

Small-Cap Boards: Challenges or Opportunities?

March 24th, 2014 | By

As NACD works with corporate directors of public, private, and nonprofit boards to oversee and ensure the long-term sustainability of the enterprise and bolster investor confidence, I am frequently asked: “What companies have the most significant challenges?” While unique challenges certainly exist across boards of all company types, many view the roles of small-cap public company boards to be quite challenging.

These unique challenges span time and effort (workload) requirements, compensation, talent, financing, regulation, risk, strategy, competition, and internal resources, just to name a few. Small-cap directors and governance professionals may identify and prioritize the unique challenges of these companies differently, however, but one thing remains constant and that is that small-cap companies represent the majority of companies listed on U.S. exchanges, and the long-term prosperity of these small-cap companies is essential to a growing, thriving economy.

So where can small-cap company directors turn to reinforce their strategic agility?

First, I suggest all directors read, and share with their director and C-suite colleagues, NACD’s Bridging Effectiveness Gaps: A Candid Look at Board Dynamics and NACD’s C-Suite Expectations white papers. These are both short, quick reads that can help create a constructive framework for meaningful dialogue.

Second, I highly recommend that all directors read NACD’s Board Building white paper, another high-impact, quick read. Most important in this resource is the skill set matrix enclosed in the appendix. Many companies are now using the skill set matrix to both determine and articulate the experiences and talents required for their future strategies.

Lastly, I suggest that current and aspiring small-cap directors attend NACD’s Small-Cap Forum on April 10 in San Antonio or on July 17 in San Francisco. Both sessions will focus on current and emerging issues facing small-cap boards, and these interactive events will include a range of interactive, peer-to-peer networking opportunities for robust dialogue.

Contact me at hstoever@NACDonline.org if you have specific questions or suggestions on how NACD can assist you, your board, and other small-cap directors advance exemplary board leadership.

How Small-Cap Directors Can Surmount Challenges, Capitalize on Opportunities

March 12th, 2014 | By

While legislation—such as the Jumpstart Our Business Startups Act (JOBS Act) and Sarbanes-Oxley (SOX)—has eased some of the burdens small companies face when looking to go public, many of these companies now face the challenge of establishing effective governance structures. Limited resources and smaller staffs can lead to blurred lines between operations and oversight. Additionally, recruiting the right talent can also be difficult since small-cap companies may compete against their larger peers for talent.

Though lesser in market cap, these companies are growing in relative number. Small-cap companies compose nearly 80 percent of U.S.-listed public companies—4 out of 10 companies trade on the NYSE, Nasdaq, or NYSE MKT.

Recognizing that small-cap directors have a need for specific corporate governance resources, the National Association of Corporate Directors (NACD) developed the NACD Small-Cap Forums exclusive for small- and micro-cap company directors. The forums—held on April 10 in San Antonio and on July 17 in San Francisco—feature seasoned directors from small-cap companies and subject-matter experts on financing and capital markets and board building.

The keynote speaker is Adam Epstein, founding principal of Third Creek Advisors,  lead director of OCZ Technology Group Inc., and author of  “The Perfect Corporate Board: A Handbook for Mastering the Unique Challenges of Small-Cap Companies.”

Topics to be addressed include strategy and risk, board-shareholder communications, and shareholder activism. To view the full agenda or to register, visit http://bit.ly/1i5NcBu.

How to Land—and Keep—the Right Board Seat

October 25th, 2013 | By

What does it take to get on a board? It’s not an easy task. Identifying, approaching, and successfully procuring a seat on the right board can be a long, and sometimes daunting, journey. This panel offered insights on the future of boardroom composition. Having a board made up of people with relevant skill sets and experience is critical in today’s competitive business environment, and boards want the best candidates available. The panel discussed the latest trends in director recruitment and how they impact the search process. It also discussed the qualifications most commonly found in successful candidates. Maggie Wilderotter, chairman and CEO of Frontier Communications Corp. and director of Xerox and Procter & Gamble, shared her perspective and experiences, having served on 23 public company boards over the last 28 years.

Highlights:
1. Boards are focusing more on succession planning—looking three to five years out for the skills they’ll need to help drive success. It’s not surprising that most board searches still focus on CEOs (which is what large-cap companies want) or business unit heads (which mid-cap companies seek). Whatever the title, the key is that person has a track record of making good decisions. What’s also notable is that the majority of directors landed on boards because they knew an influential person, such as another director, who recommended them.

2. Board search firms will often reach out to CEOs and directors to ask for the name of the best director on their board and why that person provides the most value. Often the characteristics of those “best” directors are similar. They keep the company top of mind. They are bright and have good judgment. They challenge, but do so respectfully. And they mentor management. They are also generally likeable and are easy to interact with.

3. If you’re looking for a board seat, you need to be able to articulate where you could add value. That often means focusing on the two or three industries where you believe your skills would be a great fit. And be strategic in identifying companies on whose boards you would like to serve, then make it your mission to get to know those directors. You also need to understand who else is on the board and be comfortable that you would fit with the culture and values.

Speakers:
Robert E. Hallagan
Vice Chairman & Managing Director, Board Leadership Services, Korn/Ferry International

Maggie Wilderotter
Chairman and CEO, Frontier Communications Corp.; Director, Xerox, Procter & Gamble

This summary provided by PricewaterhouseCoopers.