Archive for the ‘The Value of Questions and Curiosity’ Category

D100 Directors Impart Their Best Advice

November 30th, 2015 | By

We sometimes all wish we could go back in time to advise ourselves on how to approach a new challenge or community given the knowledge and experience we have today. For the 2015 NACD Directorship 100 (D100), each honoree was asked to do just that. D100 directors were asked to provide a short, written response to this question: “What is the best advice you would give to a first-time director?” The D100 editorial team received responses from most honorees and they ranged from pithy maxims to stories about the challenges of staying independent.

A portion of the responses from the Class of 2015 D100 directors follows. Profiles of D100 honorees can be found in the November/December issue of NACD Directorship magazine.

Gary AndersonGary E. Anderson

Chemical Financial Corp., Eastman Chemical Co.

“I found that the best way to [contribute] was to frame appropriate questions dealing with the topic at hand. It doesn’t matter what the issue is, whether on corporate strategy, short-term tactics, succession planning, compensation, or risk management. The use of appropriate questioning also can work at home with the family!”



Veronica BigginsVeronica Biggins

Avnet, Southwest Airlines

“I fully embrace the Southwest Airlines and Avnet way of doing business: treat your people well and they will be equipped and motivated to treat your customers extraordinarily well, and that will produce distinguished rewards for your shareholders. Everyone is important, in every nook and cranny of the business, and every decision at the board level should involve the question, ‘How will this affect our people, our principles, and our culture?’”


Paula H. J. Cholmondeley

Dentsply Intl., Nationwide Mutual Funds, Terex Corp.

  • “Know your shareholders. What are their expectations? Is the company meeting them?
  • “Know your colleagues. Diversity of views, backgrounds, and experience enriches the company bottom line. Learn where your colleague’s views differ from yours. Understand why. Have courage and join them in candid discussion.
  • “Know your management team. Do they live their values? Are they delivering results?
  • Be involved in NACD, as governance is a learned skill and doing it right keeps our private enterprise system strong.”


Betsy HoldenBetsy D. Holden

Diageo PLC, Time Inc., Western Union Co.

“The best advice that I received as a new director was, first of all, choose wisely. Select an industry and company that you are really interested in, a management team that you believe in, and a board where your skills and experiences are relevant and will add value.

“Secondly, what really differentiates the best directors is how they interact with management and the other directors. Good directors are confident and courageous, and challenge management in a positive, constructive way…They understand that chemistry is the intangible that drives board effectiveness and they really listen to and treat other directors with respect.”


Nancy KarchNancy J. Karch

Genworth Financial, Kate Spade & Co., Kimberly- Clark Corp., MasterCard

“Some of the best advice I received as a new director was to accept that this role is different than anything I had ever done, and to have patience to learn the ropes. [A director] is an advisor, a member of a peer team, a leader on governance matters, a decision maker on some matters—[it’s] a mix unlike anything else. Plus, as in any job change, one is entering a new culture, and in the case of a board, both a company and a board culture. So be patient.”


Tim ManganelloTimothy Manganello

Bemis Co., Delphi Automotive

“The best advice I received was pertinent to me both as a director and as a chair/CEO. That is: ‘Tim, be yourself, remember that is what got you here.’ [That advice] caused me to think about hard work, integrity, ethics, and striving to make the proper decisions.

“It also reminded me that as my career evolved from working summer jobs in automotive plants to the boardroom of BorgWarner, I listened to, learned from, and developed relationships with people from all levels of society. This has become a valuable tool in the boardroom. Each time ‘a sticky issue’ is discussed, I remember to think back to my previous experiences and express what I think is the proper approach.”


Sarah RaissSarah E. Raiss

Canadian Oil Sands, Commercial Metals Co., Loblaw Cos., Vermillion Energy

“The best advice I received came from a very seasoned director. He said that I should find a person or two on the board that I could best relate to and either ask them to be my ‘board buddy’ or just make them my ‘board buddy’ without even asking. This person would help me understand current board dynamics, help me understand the history as necessary, and provide feedback on the value I brought to the board. I have used this technique on every board to which I am appointed, [and it] has allowed me to be more productive and a valuable contributor more quickly. I am most appreciative of my ‘buddies.’”


Ronna RomneyRonna Romney

Molina Healthcare, Park Ohio Holdings Corp.

“Three people gave me great advice when I decided to accept board positions at Molina Healthcare and Park Ohio. The first was Mary Molina, the company’s chair. It was simple but profound: ‘Remember the mission. It is the cornerstone of our corporate culture.’

“The second came from Ed Crawford, chair and CEO of Park Ohio. He said, ‘Act with integrity at all times and have the courage to do the right thing.’

“The third was from my husband, Bruce Kulp, former general counsel of Ford Europe. He counseled me to listen, get as much information as possible, trust in the power of common sense, and to always think strategically.

“Lastly, the people you deal with in management and the board are human. They have families. They have good days and bad days. Kindness is powerful, even in the boardroom.”


Olympia SnoweOlympia J. Snowe

Aetna, T. Rowe Price Group

“One of the key components of executing critical judgment is ensuring an ongoing evaluation of how the company’s short term goals enhance its strategy for creating long-term value. That requires early and extensive director engagement in the shaping of the strategy, greater understanding and knowledge of business operations, and constant assessment and management of the risk.

“In this era of deeper investor involvement, it is more essential than ever for boards to communicate to shareholders the extent to which the independent directors are vigorously exercising their due diligence towards maximizing the value of the enterprise.”


Ron SugarRonald D. Sugar

Air Lease Corp., Amgen, Apple, Chevron Corp.

“Select your boards carefully…You should be mindful of geography, meeting schedules, and be prepared to put in whatever time is necessary. And when trouble comes, you must be committed to see things through—whatever it takes.

“In well-run companies, board meetings enter a predictable rhythm, and are fairly routine. It has been said that in routine times, the quality of a board doesn’t really matter—until suddenly those moments when it matters enormously. Such ‘moments’ might include a significant market shift, a technology disruption, a planned (or unplanned) management succession, a serious regulatory or litigation threat, an environmental or safety crisis, a significant acquisition, a hedge fund activist campaign, or a hostile takeover attempt. In those moments, the board’s collective wisdom, perspective, and mature judgement can make—or break—a company.”


Dave WilsonDavid A. Wilson

Barnes & Noble Education, CoreSite Realty Corp.

“The best advice came from the counsel I engaged for [a] special committee. He noted the fiduciary duties of directors formed a foundation but not the entire structure. The greatest challenge I will ever confront as an independent director, he said, is ‘independence.’ He was speaking not of the independence necessary to meet SEC and NYSE thresholds. Rather, he spoke of the independence of mind, thought and action.

“What our attorney never told me was how challenging it may be to hold fast when you are in the minority, but how critical it is to our governance system that you do.

“Polonius may have been a pompous fool, but I still find value in these words: ‘This above all: to thine own self be true, And it must follow, as the night the day, Thou canst not then be false to any man.’—William Shakespeare, Hamlet, Act 1 Scene III.’”

Review the full list of D100 honorees at, and take a few moments to consider who you might nominate for inclusion in our tenth anniversary list. A call for nominees will be issued to all NACD members in early 2016.

Josh Klein on How Technology is Transforming Commerce

October 12th, 2015 | By

The word hacker carries many connotations, most of them negative. But is it possible that hacking can be a force for good? During his keynote speech at the 2015 NACD Global Board Leaders’ Summit, technologist, author, and self-described hacker Josh Klein offered a fast-paced dive into the misconceptions that directors and executives may be perpetuating without even recognizing their error.

Josh Klein

“Disruptive trends in technology, culture, and business are converging,” Klein observed before exploring four areas in which this convergence is creating unprecedented opportunities.

  1. Code. In 2006, the cost to develop a website was exorbitant by any standard. Today, thanks to the multitude of free web-development tools now on the market, the cost is next to nothing. In Klein’s words, “It’s getting cheaper and cheaper to validate your business concept.” This fact alone will grow the pool of competition exponentially, because anyone who knows enough code to use these tools and has a marketable business plan can start a company. Anyone from legitimate start-up entrepreneurs to criminal masterminds can code a site, which means that companies must anticipate and plan for competition of varying legality and ethical standing.
  2. Culture. “Tech doesn’t spring from the ether,” Klein pointed out. “It emerges from the attitudes and desires of users.” Information can be shared and spread almost instantaneously, increasing the likelihood that a company will at some point receive undesirable attention. According to Klein, technology creates a meritocracy via democratic exposure of reputation. But instead of trying to hide negative feedback, companies should get ahead of the problem and own it as best they can. He cited AirBnB as one example of how digital technologies have created marketplace meritocracies. Responding to an incident in which an AirBnB guest caused significant damage to a host’s home, the company rolled out a million-dollar host guarantee policy. This move both acknowledged the problems with the company’s old business processes and affirmed its commitment to improving those systems and protecting AirBnB hosts.
  3. Competition. With the rise in sources of competition, businesses that rest on their laurels and become complacent about their success are putting themselves in a dangerous position. Looking out over the audience, Klein underscored the obvious: “We’re all sitting here, and the innovation may be happening someplace else.”
  4. Future Context. To many of us it seems that everyone is connected by the Internet, but only about one-third of the world’s population is online. Klein observed that the remaining two-thirds may be illiterate and may not have bank accounts; they do, however, participate in the black market, which is currently valued at $10 trillion and accounts for $1 in every $7 exchanged, making it the second largest market on the planet. Companies must anticipate how these demographic shifts will create new business demands and transform the face of e-commerce.

Klein ended by entreating his audience not to panic but instead to begin experimenting, learning, evolving, and to do this all as quickly as possible. “Do it now, because if you’re not, someone else is.”

Raising the Bar on Director Performance – New NACD Program Outlines 5 Keys to Success

July 27th, 2015 | By

The bar for director performance has been raised. A volatile economic environment, increased regulatory scrutiny, impending cybersecurity threats, and shareholder activism have all shifted the expectations for what should happen in the boardroom.

Responding to those growing expectations for directors, The National Association of Corporate Directors (NACD) has developed a new program—called Advanced Director Professionalism®—that focuses on understanding the market forces and “next practices” that will shape the boardroom in coming years.

At the inaugural Advanced Director Professionalism program in Philadelphia June 1-2, nearly 60 directors joined corporate leaders and subject-matter experts to discuss these market forces and next practices. Five key insights from the event follow:

  1. Avoid the “tyranny of unanimity.” In a structured, interactive, scenario-based workshop, participants were confronted with a board of seasoned directors who were reluctant to dissent from the majority at critical decision-making moments. Such groupthink dynamics preempt consideration of viable alternative strategies and responses—a failure that can lead to disastrous business outcomes.
  1. A healthy board culture is needed. Even effective boards are not immune to dysfunctional dynamics, such as hasty decision-making, disengaged directors, and too much deference to authority; yet the warning signs of dysfunction often go unrecognized. Continuous and rigorous evaluations can identify unhealthy dynamics early on, while periodic rotation of board leadership roles helps infuse fresh perspectives and approaches.
  1. Focus on dynamic agenda-setting. Participants learned how to maximize the limited time that directors spend with each other and with management. While some full board and key committee agenda items are mandatory, these need not dominate meetings. Instead, board leaders should ensure that agenda development is clearly linked to major strategic opportunities and risks, and should plan reviews throughout the year in response to changing marketplace realities.
  1. Cybersecurity is no longer an IT issue but an enterprise-wide strategic risk. The ramifications of cybersecurity breaches now include undermining customer trust, damaging operational effectiveness, and jeopardizing corporate strategy, to name just a few. Ownership of cybersecurity risk is distributed across the entire firm, from the CEO to frontline employees, who must all engage in secure behaviors with respect to system and data access. Boards should examine how effectively cyber risk is governed internally.
  1. Become the keeper of corporate strategy. Board members often have a longer tenure than the CEO, which enables them to see long-term strategies through to completion. They can help ensure an effective strategy development process and engage management throughout strategy execution. Boards should challenge the fundamental assumptions on which the strategy rests—during periods of stability and steady profits, as well as times of disruption and emerging threats—and provide guidance to management as it considers alternative options.