Posts Tagged ‘corporate strategy’

Ken Daly Featured on CEO Talk Radio Discussing “Strategy Role of Boards”

September 9th, 2011 | By

Ken Daly, NACD president and CEO, is featured on CEO Talk Radio discussing the role the board plays in helping to shape and refine a sustainable strategy. Directors play a key role by selecting the right CEO for the company’s future, and by working with the CEO and senior management to revise the strategy as the company’s situation evolves. Monitoring execution of the current strategy is another key role, according to Daly.

Click here to listen to Ken’s interview.

Selecting and monitoring the right company strategy is essential to sustained profitability. In the Report of the NACD Blue Ribbon Commission on the Role of the Board in Corporate Strategy, NACD offers best practices to help CEOs and boards become more engaged in advising, assessing and monitoring strategy together, placing special emphasis on cooperation and collaboration.

As Daly explains in the interview, there is a powerful relationship between exemplary board performance, sustained profitability and job growth. Directors serve as fiduciaries for shareowners, but not merely for the short term; boards serve owners best by focusing long-term on corporate performance and growth.

The board’s strategy role extends to the function of the board and the way board meetings are conducted. The most effective meetings focus on actionable items, with agendas set to allow for dialogue about key issues. Between meetings, directors can complement management information by conducting their own research. Board members also need to listen to shareowners to understand their concerns and, in turn, help them understand what the company is doing. (Note: In face to face meetings, directors need to ensure that they speak with one voice and comply with Regulation Fair Disclosure.)

NACD has a number of resources available, including white papers, blue ribbon commission reports and surveys, to help directors and boards navigate their roles and deliver value for their companies. NACD also hosts a number of conferences and forums around the country where board members can learn best practices from corporate governance experts and leading directors, as well as network with other directors and boards.

To listen to the full interview with Ken Daly and hear more about the board’s role in shaping corporate strategy, visit http://www.robertgbarnwell.com/039-ceo-talk-radio-your-first-board-seat/ or download the podcast on iTunes.

Boards Must Prepare for Surge in Shareholder Activism

March 16th, 2011 | By

After a two-year slumber brought on by the financial crisis, activist investors have suddenly awakened. The resurgence is driven in part by the sudden emergence of U.S. private equity firms as activist investors. This change in the corporate climate means that publicly traded companies must position themselves so that they do not become targets of these investors.

How can this be done? The answer is for directors to proactively engage these investors, thereby maintaining open lines of communications and building good will. This means that boards need to take into account the concerns these activist investors raise over a company’s stock performance, governance practices and perceived weaknesses in the business operation. In so doing, directors are better situated to thwart adversarial actions and “staged” revolts by certain activist investors.

After all, activist investors can have a profound impact on the overall composition and direction of a board. For starters, activist investors bent on driving the agenda of a company can attempt to pick up seats on corporate boards of directors. These investors can also wage public battles that tarnish a company’s image—accusing directors of everything from conflicts of interests to lax governance practices.

And the impact of shareholder activism on board operations only promises to grow with the recent Securities and Exchange Commission ruling regarding the Dodd-Frank Act’s “say-on- pay” provision. The provision allows shareholders of public companies the right to weigh in on executive compensation. This right will likely subject executive compensation packages to greater levels of public scrutiny. The impact of this heightened investor activism may also force compensation committees to reexamine compensation plans and address increased regulatory requirements.

A healthy relationship between directors and activist investors does not mean that directors cede complete control. But proactive engagement does mean that directors consider investor proposals seriously and articulate a clear a strategy for enhancing corporate value. As NACD has learned from its experience in convening investors and directors to discuss expectations and shared goals, it is important for boards to establish processes for shareholder communications. Specifically, boards should implement strategies for engaging large, long-term shareholders in dialogue about issues pertaining to the company’s future and corporate governance.

At NACD’s February 22 Virtual Roundtable, institutional investors and long-term shareowners spoke candidly with corporate directors about various issues, such as executive compensation. When controversial topics like executive compensation arise, independent directors—such as the board chair, lead director, or appropriate committee chair—should be a part of board communications with shareholders. This type of proactive board communication with shareholders can go a long way toward minimizing shareholder resolutions.

Of course, public battles with investors will erupt from time to time. To minimize the bad publicity and other fallout from these battles, boards must prepare themselves for crises ahead of time. A key step is for a board to understand the strengths and perceived weaknesses of its company’s structure and corporate governance policies. That allows the board to develop comprehensive plans that incorporate member responsibilities and provide a clear path for the company to present its direction to shareholders.

Activist investors cannot, and should not, be ignored. By addressing their concerns and making an effort to share common goals, directors can lessen the chance of confrontations with shareholders while promoting good corporate governance.

Wanted: A New Board Chair for the BBC – My Country Needs You

November 9th, 2010 | By

The British Broadcasting Corporation is looking for a new chair of the BBC Trust, the governing body of the organization. If you are reading this in the United States (and most of NACD’s 10,000 members will be) there is no reason for you to care about this as much as I do, but nontheless I hope you will look carefully at the job description because the UK’s public service broadcaster needs great governance as never before. Brush up on your British English and get your application in.

Here’s a primer to get you started: in the UK every household with a TV pays a fee to the government and the entire population can access BBC television, radio and online content for free and on demand. The license fee, as it is known, is supplemented by sales of programs and formats ( including Dancing with the Stars, The Office, Dr Who, Life and all of David Attenborough’s output) overseas.

In recent years the BBC has been under threat from Rupert Murdoch’s satellite and cable service which of course carries all the BBC channels. Rupert owns a lot of rights to major sporting events and he also owns the technology which beams those events into people’s homes. He charges a lot for this. People who choose to watch sport rather than comedy, drama, nature, children’s programming (yes, the BBC brought you the Teletubbies) and who pay their bill to Sky, don’t see why they should pay up if they don’t choose to watch the Beeb. This said,more than 95 per cent of the British population avail themselves of some BBC service every week – the broadcaster remains resolutely at the center of everyday life.

With the election of a new coalition government, the UK is facing public service cuts that not even Maggie Thatcher would have dreamed of. The BBC will suffer a 16 per cent cut in its income and the Chairman’s salary has taken a similar hit.

Less income means staff cuts, more repeats in primetime, and limits on the kind of technological innovation that has led to the BBC becoming one of the world’s most trusted digital guides.

This matters to me because the BBC practically brought me up. I was one of those children with square eyes, a pasty complexion and the ability to make great halloween costumes, sex a tortoise and identify the cuisine, terrain and music of all world capitals because I had seen it on TV. I learned to expect the Spanish Inquisition, and had my own silly walk. Like all Monty Python fans I knew when a parrot was an ex parrot.  All my crushes were BBC presenters and my female role models were too. They still are. 

My first job was with the BBC and I was the envy of everyone I knew for there could be no more exciting and interesting place to work. Here, I could learn faster than I could anywhere else, and each morning as I walked through the Television Center scene dock past the Tardis and the sets of my favorite sit coms (Mrs Bucket’s table for candlelit suppers, Mrs Slocombe’s shopfloor bust from Are You Being Served? and, later, Edina and Patsy’s office from Ab Fab) I felt lucky to be there and proud to be part of the BBC. I worked in the newsroom then. I didn’t last long. The BBC demands a rigor in its news services that to which I was totally unequal. Sidelined from the serious stuff, I went on to run the BBC’s daytime services and later came to the US to be part of the early years of BBC America.

I'm Proud of the BBC

I'm Proud of the BBC (video)

I still love the BBC and I am glad to say others do too. Check out this video, now something of a hit in Britain. For a slightly more upscale appreciation of the BBC services check out this promotion for the range and diversity of music featured by the public service broadcaster.

I expect the job of chair of the BBC Trust will go to a Brit, and someone well-known to the current UK government, but I urge you to think about it carefully. The BBC is worth having, and so, therefore, is this job.