Posts Tagged ‘Reatha Clark King’

NACD Chair’s Address: Forecasting, Innovation, and Change

October 13th, 2013 | By

Wow.” NACD Chair Dr. Reatha Clark King had a tough act to follow—a trio of rock violinists—but her welcoming remarks to the 2013 NACD Board Leadership Conference left attendees inspired and ready to engage in the next two days of sessions. Focusing largely on this year’s conference theme—Future-Proofing the Boardroom—Dr. King drew off her experience as a scientist, a profession based on “forecasting, innovation, change, and being first,” to urge directors to embrace both the opportunities and challenges of the future.

Noting the record attendance at this year’s conference, Dr. King observed “an impressive collaboration of strong-forward looking leaders.” Foreshadowing Monday’s official kickoff of NACD Directorship 2020™, however, she noted that we do not know what the future will bring–other than significant change. And since she believes that each of the attendees has “some” of the answers, in order for the country to move forward, King urged attendees to share their experiences and wisdom over the next few days. In doing so, directors can build a knowledge base of new ideas, trends, opportunities, and solutions that will aide in their efforts to not just meet, but actually embrace future challenges.

The most serious threat the boardroom faces, according to Dr. King, is a lack of imagination. It is necessary for directors to believe what they do creates value for shareholders and stakeholders. Further, every boardroom should draw from a diverse set of sources for information and ideas. As such, she encouraged attendees to not just listen, but participate and work together during this important conference. “Let us prime our boards now so we can meet the challenges of the future.” 

Culture and Leadership Critical for Future Boards

July 18th, 2013 | By

The rate and complexity of change in the marketplace is greater than ever before—and not showing any signs of slowing. From innovation and disruptive technologies to regulatory activity and stakeholder scrutiny, companies are constantly presented with new risks and challenges. As NACD’s new Chair Reatha Clark King observed, writer William Gibson captured the inflection point most corporate boards find themselves approaching: the future is here, it’s just not evenly distributed. As these changes force global economic shifts, it is necessary for those in the boardroom to understand and prepare for the future structure of directorship now.

This week, NACD held the second in a series of exploratory meetings in Chicago to discuss how the boardroom can define and prepare for the challenges and opportunities expected in the next five to seven years. This meeting series—held in New York City, Chicago, and Los Angeles—will culminate in the kickoff of NACD Directorship 2020 at the 2013 NACD Board Leadership Conference. An effort to provide directors with a clear vision of what their roles will resemble in the future, NACD Directorship 2020 will extend from educational programs and roundtable exchanges to publications, all shaped by feedback from these events.

At the Langham Hotel in Chicago, more than 100 directors attended the afternoon session to discuss two topics: the future state of communications between the board and C-suite and how to select performance metrics that will generate sustainable organizational profit. Sessions were led by NACD President and CEO Ken Daly; Akamai Technologies Lead Director and Audit Committee Chairman Martin Coyne; NACD Chair King; and former Bell and Howell CEO, current NACD Director, and Northwestern University Professor Bill White. During the highly interactive sessions, each table was given a specific set of questions to discuss and provide thoughts among their peers. Takeaways from the event include:

  • Directorship is a part-time job with full time accountability. Inherent in the board/C-suite relationship is an information imbalance. However, with the right culture and board leadership, the board and senior management can easily communicate expectations and necessary information.
  • A CEO’s leadership style can serve as an indicator that the risk of information asymmetry has become too high. Directors establish a level of trust with the CEO and management to allow for board access to other members of the senior team, as well as site visits to see the company’s operations.
  • With an expanding board agenda, process and expectation setting are critical. The board should clearly communicate to management the types and format of information that need to be presented.
  • An empowered lead director or non-executive chair can help mitigate the risk of information imbalance. By facilitating communication channels and work between the independent directors and the CEO, this leadership position can break down some of the road blocks that may develop between the C-suite and directors. The relationship between the CEO and lead director or chair should be transparent.
  • Culture is critical in effective dialogue between the board and senior management. With the right culture, directors can be sure they are aware of the risks that are keeping the CEO up at night.
  • Sharing information via performance metrics, which are focused on what directors need to know, can bridge gaps in information flow. Ultimately, the board has to make winning decisions which are informed by data.
  • Today, directors balance short-term shareholder expectations with generating long-term sustainable profit. The role of the stakeholder, though, is more significant than ever before and expected to grow. In the future, directors will have to be increasingly focused on balancing shareholder return with stakeholder concerns.
  • It may be difficult for the board to address and to communicate with every stakeholder. The board should identify which stakeholders are critical to the strategic plans, and target communications to those groups.
  • Balance also extends to leading versus lagging indicators. The board should first approve the right strategy and set goals accordingly. Leading indicators will drive ensuing performance—but lagging indicators are also necessary to provide the right feedback loop.
  • Innovation is important to the success of any company. How innovation is defined, though, is largely dependent on the company, and should be rooted in the corporate strategy. For some, innovation will manifest in processes, products, or both.

The next NACD Directorship 2020 event will be held Sept. 10 in Los Angeles. Between events, NACD’s blog will feature viewpoints and research from our NACD Directorship 2020 partners—Broadridge, KPMG, Marsh & McLennan Cos., and PwC—that will take a deeper look into the emerging issues and trends that will redefine directorship.

NACD Announces Blue Ribbon Commissioners for Lead Director Report

June 7th, 2011 | By
An elite group of more than 20 corporate directors and corporate governance thought-leaders have begun work on the 2011 Report of the NACD Blue Ribbon Commission on the Effective Lead Director, led by co-chairs Barbara Hackman Franklin, former U.S. Secretary of Commerce , director of Aetna and Dow Chemical Company and chairman of the board for NACD, and Irvine Hockaday, director for Ford Motor Company, Estée Lauder and Crown Media Holdings.

Lead directors play a significant role in the boardroom, enhancing board effectiveness by acting as independent figures in communicating the needs between the company’s management and board. Five years ago, only 39 percent of boards had lead directors. That number has almost doubled. Today, 66 percent of boards have a lead director.

NACD broadly defined the duties of the lead director in a 2004 Blue Ribbon Commission Report. Leveraging their years of experience, the NACD Blue Ribbon Commissioners will clarify the role of the lead director in order to enhance the effectiveness of the lead director in the boardroom. The 2011 report will expand the earlier recommendations by exploring how the lead director role can be used to the fullest extent. Specifically, the report will discuss the evolving roles and responsibilities of the lead director; the ideal profile of a lead director; and key relationships and communications of the lead director, including those between management and shareholders. The report will also offer recommendations for future challenges facing the role.

The 2011 Commissioners who contribute their views to the report are directors from leading companies and corporate governance experts. In addition to co-chairs Barbara Hackman Franklin and Irvine Hockaday, the panel includes:

Holly Gregory, corporate partner at Weil, Gotshal & Manges, will also serve as governance counsel to the Commission.

The 2011 Report of the NACD Blue Ribbon Commission on the Lead Director is scheduled for release at the NACD Annual Board Leadership Conference, October 2-4, 2011, in Washington, DC.