Fay Feeney is CEO of Risk for Good, an advisory firm providing board chairs and corporate counsel guidance to monitor, govern and leverage the fast-moving landscape of social media, technology and the Internet.
One of my table mates at the NACD Director Professionalism course I recently attended in Deer Valley, UT was Allan C. Golston, president, United States Program of the Bill & Melinda Gates Foundation. It’s amazing who you sit next to at NACD events. Allan swore his learning wasn’t disrupted by my tweeting during class, and shared with me his takeaways from two days with NACD.
“The course was more than ‘rules of the road’; it was also a dialogue around how to think about the fundamentals of being an effective director in the 21st century in a strategic way. Whether it was rethinking what it really means to have an independent mindset, or rethinking what it means to have courage in the boardroom, or rethinking what it means to represent shareholders—I found these types of fundamentals the most useful.”
Allan Golston with Rob Galford, Compensation Chair, Forrester Research and NACD facilitator
I agree. I invested my time and money to have a refresher on fiduciary responsibilities and to pick up some useful tips on how to contribute most effectively in the boardroom and on key committees, but I came away with so much more: insights that have reshaped my thinking about how to lead in governance and examples of great board behaviors that will galvanize my own priorities and performance.
Mike Lorelli, CEO of Water-Jel Technologies, and another high-flying classmate, agreed. “As much learning in two days, as in two years of an MBA program,” he said.
Mike Lorelli at the NACD resource center
The sessions at Director Professionalism are led by active public company directors. I loved hearing Michele Hooper, who sits on the boards of Astra Zeneca, UnitedHealth Group, PPG Industries and Warner Music Group, encourage newbies by saying: “Everyone has a “first” board seat. Today’s most experienced directors had a first board seat.”
She encourages boards to consider qualified candidates without prior director experience, maintaining that, if your board is looking to expand their recruiting to engage more diverse thinking, they will need to refresh their thinking about board composition.
Although the NACD facilitators were great, the really valuable learning often came from other members of the class. “There really weren’t 10 instructors—more like 70 when you count the learning from the 60 peer-level CEO’s and directors,” said Mike Lorelli. Allan Golston agreed.
“The ‘official’ instructors were really strong, but the interplay and dialogue among the group enriched the content and learning well beyond what the official instructors provided.”
Pamela Packard is a private company director who is active in NACD’s New York chapter. She felt that the snowy setting of the Montage Deer Valley Resort provided lots of opportunities for “off the record” candid conversations among directors from diverse backgrounds and experiences. “These discussions complemented the formal sessions.” She also told me “newcomers to corporate governance had the chance to glean the subtleties of different board cultures and communication styles, learning from those of us with more experience.”
Pam really valued the plethora of publications and extra learning resources provided by NACD. “Great reference materials for future use!” she said.
Director Professionalism has a comprehensive list of learning objectives but really these were just the starting point for our class. In the fast moving world of governance, it’s not only what you know, but who in your network can help you keep your knowledge current. Thanks for a great class. I’ll keep on learning with NACD and look forward to becoming a 2011 NACD Governance Fellow.
To sign up for Director Professionalism in Houston TX, San Francisco CA, or Palm Beach FL, please click here
A recent blog by British twitter maven Lucy Marcus got me thinking about where new thinking and fresh strategy comes from. Lucy rightly points out that new beginnings take time and that, in this cost-conscious era, there is a risk that no company has the patience to sew seeds and give them time to grow. We’ll call this impatience, and certainly it is a failing that often besets the super-bright who are restless company executives, and their peripatetic counterparts who become board members.
There are other stumbling blocks in the way of innovation too, and chief amongst them is information overload. At NACD’s recent Investor Insights Roundtable , Denny Beresford revealed that he had seen proxy statements that were longer than the 10-K. Anne Sheehan, director of corporate governance for CalSTRs, concurred. “Don’t send me the charter; I can read that for myself,” she pleaded, making a request for only critical information, presented in a concise and accessible form. As all of us know, too much information can be as bad as too little. Swamp your readers and they’ll find it all too easy to miss your point.
But there is one shortfall that always stands in the way of progress for fresh thinking, and that is lack of imagination. Too few C-suites, committees and other information providers really think about the message they wish to convey, and ways to engage the audience they seek. The best teachers understand that without engagement, there is no education. Information is passed and knowledge is gained through story-telling, entertaining experiences that stick in the mind, and the thoughtful paring down of data and equally thoughtful pumping up of passion, color and context. These are skills and approaches that have value in every area of life, business and governance. They should not be confined to the classroom.
our engagement quotient was high: Richard Levick discussed crisis planning at the board level, using the miserable face of an oil-soaked shag and the equally miserable face of former BP CEO Tony Hayward to make his key points; Rob Galford, compensation chair at Forrester Research, used his physical presence and party tricks (“point your finger in the air. Now, on the count of three, point it at the spokesperson in your group”) to drive home some interesting thoughts on performance metrics; and Charles Elson, a director on the board of HealthSouth corporation, used catch phrases (“Don’t be sleazy; Don’t be sloppy”) to help more than 60 directors grasp the essence of the Duty of Loyalty and the Duty of Care.
All of this leads me to an interesting opportunity for washed-up television producers such as myself: We should position ourselves as Chief Engagement Officers for corporations prone to boring their boards to death. We could be creative conduits, taking the dry, dense and dusty and turning it into presentations worthy of prime-time. Similarly, all boards should look for comedians down on their luck, children’s book illustrators with a gift for detail that captivates, and song and dance acts capable of rhyming “audit” with either “plaudit” or “sod it.” Once identified, this rag-tag group should form an Engagement Oversight Committee with advisory status to the board. This EOC would work alongside the GC and reshape anything terminally turgid into a director’s delight. It would solve an unemployment problem in the entertainment sector, and would greatly enhance not only board meetings, but also board, company and stock performance. It might also offer an interesting second career opportunity for burned out teachers…
If you sleep at night surrounded by spreadsheets and with PowerPoint as your pillow, urge your company to consider this engagement initiative, and soon you’ll look forward to board meetings: We put the “Glee” in governance.
With all the noise on the topic, I recently decided to spend some time asking Gib Hedstrom to give me the straight scoop about how boards address the issue of sustainability. Gib has been the “expert in the room” on these questions at more than fifty board meetings with major global companies, including Air Products, Ashland, and AlliedSignal (Honeywell). I asked him three simple questions. (OK, actually I asked him four):
What’s the best way for a board to define sustainability?
What do the “better boards” do in the area of sustainability?
As an individual director, what should I know about the topic? What questions should I be asking?
Here’s how Gib responded:
1. What’s the best way for a board to define sustainability?
Sustainability is about achieving enduring growth and profitability in the harsh face of 21st Century realities. The “new world order” of a swelling population, oil depletion, global warming, water scarcity, and economic turmoil makes this the fiercest competitive battleground for the next 20 years. It means rethinking everything.
It’s what I call “The Messy Transformation.”Most companies face significant risks. Yet whether you sell technology or transportation or consumer products – the opportunities are massive.
2. What do the better boards do in the area of sustainability?
The better boards bring sustainability into their deliberations about both risk and opportunity. On risk, they do three things:
Take a Business Portfolio Risk approach. For example, 20 percent of U.S. coal plants are scheduled to shut down by 2015. If that’s your energy source, it calls for a Plan B — and fast!
Encourage action on managing the relevant risk profile (short and long term) on Carbon Risk. For example, we see Samsung announcing that by 2013 it will cut by 50 percent the greenhouse gas emissions from its own operations and from the use of its products. We see Sony announce its plans to achieve a zero environmental footprint by 2050.
Keep Operational Risk management front and center. You don’t have to look far back in recent headlines for evidence about what a single disaster can do to your operations and public trust.
For the opportunity side, it’s about investment. Even in this uncertain financial climate, over $100 billion has been invested in renewable energy in the past two years. Companies like Cisco, IBM, Google and Microsoft are rushing to capture “smart grid” growth opportunities. P&G has a five-year goal to accumulate $50 billion in sustainable product sales by 2012, and will have “Sustainable Innovation Products” in 30 million U.S. homes by the end of this year. Bank of America recently announced it is ahead of schedule on its 10-year, $20 billion business initiative focused on addressing climate change.
3. As an individual director, what should I know about where a company stands on sustainability? What questions should I be asking?
At the next board meeting (or better yet, before it), ask these questions:
What would it look like to be a true sustainability leader? What would be the characteristics (e.g., zero waste, carbon neutral)? What would the portfolio look like (e.g., percent of sales from green products, services and solutions)? Is this just from our own operations or across our full supply chain?
Do we have a robust sustainability strategy and a multi-year plan that identifies our risks and opportunities? Our own sustainability scorecard?
So that’s what we hear from the true expert. Now, what does your board do?