Posts Tagged ‘board education’

Hu, Valukas, and Markopolos on Corporate Governance

November 10th, 2010 | By

As the country emerges from the worst financial downturn since the Great Depression, directors, executives and other corporate governance experts gathered to honor the 100 most influential players in the boardroom and analyze recent mistakes and how they can be avoided at the NACD Directorship 100 Forum held Monday and Tuesday in New York City. The 100 honorees were commended at a dinner Monday night in a keynote address by Henry Hu, director of the SEC’s Division of Risk, Strategy and Financial Innovation.

Hu presented his “decoupling” concept, and explained how it relates to boards’ current challenges, especially as directors face the new Dodd-Frank Act. He pointed to the Act as the “most comprehensive change in generations… representing a new era for corporations and boards that introduces new challenges and new opportunities. It is important to get the balance between corporate governance and financial innovation right.”

The Forum’s second day featured Anton Valukas, court-appointed examiner in the Lehman Brothers’ bankruptcy, explaining the actions that the Lehman board could have taken to better prepare for the company’s failure. While Valukas does not believe that failure was preventable, he did explain that, had the board asked more important questions, the fall would have had less severe of an impact on the U.S. economy. 
“In this case,” said Valukas, “one word would have made the difference: transparency.” (read Valukas’ full report here)

Also featured was Harry Markopolos, author of No One Would Listen, which details his ten-year-long investigation of Bernie Madoff’s Ponzi scheme, the largest in history.  Markopolos took a firm tone with the directors of the room, imploring them to “use your experts and don’t take numbers from management, for the sake of your shareholders and stakeholders. That’s your job.”

Time to Tone Up—Do You Need a Personal Trainer for the Social Media Age?

November 3rd, 2010 | By

“Technology leaves companies naked and it’s time to buff up,” says Phil Cowcill, facilitating a session at an e-learning conference I am attending this week in San Francisco.

WeightlifterHe believes all boards and companies should embark on a workout schedule and, if necessary, hire a personal trainer so they look good under the scrutiny of stakeholders using social media. “You can’t keep technology out of the room,” Cowcill says, “so use it to learn what your stakeholders really think, feel and see.”

Your skin, in addition to being toned and oiled, needs to be thick, says Cowcill, for sometimes your stakeholders will say and do things that you feel threaten the company, but if you learn to think of them as partners rather than threats— NACD Webinar people with whom you have collaborative dialogue—then you will gain more value than you will by playing defensively.

We discuss the recent decision by Gap, Inc. to withdraw their new logo in response to customer feedback on Twitter and Facebook.

  • Was Gap really committed to the logo or did they just float it on Facebook to test the response?
  • What have they gained in column inches and from appearing to be responsive to their customers?
  • What have they learned that will inform new product launches and strategic initiatives?

However you address the questions above, your answers will demonstrate the need for new thinking around stakeholder—including shareowner—engagement. How good does your board’s body look in the social media age? Leave your comments below.

The Global Question: Do Directors Have What it Takes?

November 3rd, 2010 | By

Having a global perspective – or at least someone on the board asking the right questions relating to global changes – is critical for today’s companies. Major international demographic changes are taking place in the U.S. and around the world. These changes impact how we do business and where our opportunities and challenges are.

At a recent gathering of corporate directors, many questions were raised about “the global question.”

  • About who in the boardroom is raising the questions, and do we have the range of skill sets, experiences, and backgrounds necessary to address these changes in the competitive environment?
  • Is someone asking what our crisis communication plan is? The plan needs to be developed well before a crisis in order to be out in front of the social media avenues, delivering the message concerning the crisis.
  • For insights on how former Exxon Mobil director Reatha Clark King and former ConocoPhillips chairman and CEO Archie Dunham handled major crises at their companies, view NACD’s webinar  (complimentary for NACD members); for more and for sample plans, see NACD’s Board Leadership for the Company in Crisis, (full disclosure: I co-authored this publication).
  • Do we have board members raising the right questions about communications in this new environment of social media, blogging, and real-time news? (p.s., have you seen some of the headlines in NACD Directors Daily about this issue – Social Media vs. Anti-Social CEO, Facebook, Twitter Help Companies Connect, or The Democratization Of Corporate Philanthropy?)

If we are to protect the reputation of the company, we can’t be the last to get the message out. Changes in criteria for board leadership to meet today’s challenges can be overlooked as well. We need to look carefully at the challenges and opportunities in our current and future environment, our short-term and long-term strategy, and ask ourselves whether the right people are at the table to meet those challenges. Click below to see a quick video about how NACD’s Board Advisory Services can help your board meet global (and other) challenges head-on.

NACD Board Advisory Services: Custom, Confidential In-Boardroom Corporate Board Education and Evaluations