Underlying NACD’s Directorship 2020 initiative is a single observation: capitalism—and the role of the director—is changing. There are the more obvious forces behind this shift: vocal shareholder activists, a steady stream of regulation impacting the boardroom, emerging technologies, and the increasingly global marketplace; however, a quieter influence is also taking hold of capitalism: looking beyond the bottom line.
Since their formation, the ultimate goal of corporations has been to generate profit, and therefore shareholder return. As such, total shareholder return has served as a universal metric for investors when analyzing a company’s performance. Recently, several companies have been profiled for their use of “capitalism with conscience.” Panera Bread, for example, has established a number of locations which allow the customer to “pay what you can”; Intel not only links compensation to sustainability but ties employee bonuses to environmental metrics; and Office Depot announced this week the second round of its national “Green Business Challenge”— a public-private partnership launched in 2010 with ICLEI USA. These companies represent just a fraction of those embracing this “softer” side of capitalism. The list of companies upping the ante with respect to sustainability efforts is rapidly growing to include General Electric, Nordstrom, Microsoft, Starbucks, and more.
Observing this trend, Northwestern University Professor and former CEO and Chair of Bell & Howell Bill White posed this question at the recent NACD Directorship 2020 symposium in New York City: should we rename “total shareholder return” to “total stakeholder return”? Although attendees did not commit to a change in nomenclature, they generally agreed that stakeholder return was a necessary consideration in the boardroom. In fact, a key takeaway from the event was a recommendation that the board encourage metrics that foster stakeholder engagement as a strategy for risk mitigation.
Establishing a metric tied to sustainability is not entirely new. In 2010, NACD’s Blue Ribbon Commission on Performance Metrics recommended boards consider non-financial metrics in addition to the more traditional financial metrics, including categories such as community engagement, environment, health and safety, and corporate social responsibility. Additionally, earlier this year NACD Directorship magazine featured a comprehensive primer to sustainability in the boardroom.
Yet many still view sustainability and shareholder return as an “either/or” situation: attention to the former detracts from the latter. At the Bricks and Sticks Sustainability Symposium—an event produced by the U.S. Chamber of Commerce’s Business Civic Leadership Center—panelists representing the various stakeholders involved in public-private partnerships observed that today it is instead a “both/and” scenario. Sustainable long-term economic growth is dependent upon continuing environmental and stakeholder health, and vice versa. Directors play a critical role, according to Yalmaz Siddiqui, senior director of environmental strategy for Office Depot. The organization’s successful Green Business Challenge was in part driven by a strong message from the boardroom encouraging increased focus on sustainability.
Innovative and sustainable solutions for economic growth often require far-reaching and long-term thinking, which can pose a challenge for boards hindered by a more immediate, short-term focus on the bottom line. At upcoming symposiums in Chicago and Los Angeles, NACD Directorship 2020 will continue to explore how—and with which metrics—the board can oversee this changing facet of capitalism.
The 2012 campaign season was predictably dominated by debate on how to jump-start America’s stalled economy. This topic was the focus of more than the presidential race; it seems nearly every candidate for office—national, state, and local—weighed in on job growth and the best policies to promote it.
Now that the noise has died away, we need to get down to business. To that end, this year’s NACD Directorship 100 Forum will focus on the theme of “Reinvigorating America” as several hundred of the men and women who sit on the boards of America’s leading companies share insights and exchange ideas on practical solutions to the critical problems ahead.
The NACD Directorship 100 Forum, which occurs on November 27 in New York City, congregates a veritable Who’s Who of battle-tested directors. As much as any public official, these are the people who will play a key role in helping the United States move forward. The services they render to investors, employees, and customers affect economic performance at every level in every locale. The entire public is their stakeholder.
Marjorie Bowen, a director for Euramax, Talbots, and Global Aviation, summed it up neatly: “There is no other gathering that allows corporate directors to share ideas, learn from one another and experts, and get updated on the key topics facing directors in today’s volatile market environment.”
The keynote speaker is David Walker, former U.S. Comptroller General, Government Accountability Office. He will present a compelling and practicable “Road Map for the Future.” Other speakers include:
Ann Fudge, director, General Electric
Ellen Kullman, chairman and CEO, E.I. du Pont de Nemours and Company
James Robinson III, director, Coca-Cola
Robert Denham, lead director, Chevron
The NACD Directorship 100 Forum is an opportunity to learn from today’s leading authorities. To join us, register here. For a full program agenda, click here.
Corporate directors today face a growing list of oversight responsibilities—from meeting regulatory requirements to providing strategic insights, leadership, and direction to executive teams.
At the upcoming NACD Directorship 100 Forum, corporate directors have a unique opportunity to not only engage with peers, but also to gain fresh perspectives from experts in the boardroom. Held on Tuesday, Nov. 27, 2012, in New York City, this event packs a punch—providing numerous leading sessions in just one day.
Tenet HealthCare Chairman and retired Global Chairman and CEO of Deloitte, Ed Kangas, said the NACD Directorship 100 Forum is “the best value in boardroom education.” For directors looking to stay ahead of the curve, Kangas recommends making “it a priority to attend. The selection of speakers and topics are top shelf.”
This event couples exclusive director education and networking sessions with recognition of leading corporate directors during a gala dinner.
Forum speakers include: Ann Fudge, director, General Electric; Ellen Kullman, chairman and CEO, E.I. du Pont de Nemours and Company; James Robinson III, director, Coca-Cola; Robert Denham, lead director, Chevron; and David Walker, former U.S. Comptroller General, Governance Accountability Office. Click here to view the full agenda and speakers.
Michael Pocalyko, chairman, TherimuneX Pharmaceuticals and managing director and CEO, Monticello Capital LLC, views the NACD Directorship 100 Forum as a “must-attend event for boardroom leaders who are committed to the directorship profession.” According to Pocalyko, the forum has something for directors of all levels of experience: “From the highly interactive knowledge exchange roundtables, to the timely and relevant panel discussions, even the most experienced directors will walk away with fresh approaches to boardroom leadership.”
Closely following an important presidential election, the forum topic of “Reinvigorating America” is as timely and important as ever. Although seating at this year’s NACD Directorship 100 Forum is limited, there’s still time for you to join us and the “who’s who” of the governance community on Nov. 27, 2012, in New York City.
Register here for an unparalleled opportunity to learn, network, and discuss key issues confronting your board.