Building a High-Performance Board
The first plenary session of Monday morning was an in-depth look at what makes a high-performing board. Panelists included Jack Krol, chairman at Delphi Automotive and director at Tyco International; Owen Thomas, chairman at Lehman Brothers Holdings; and Curtis Crawford, president and CEO of XCEO. Each panelist had undergone a difficult board development process. The session centered on their experiences and lessons learned.
Moderator Bob Hallagan of Korn/Ferry International began by asking each panelist, “What does a high-performance board look like?” Krol started with three helpful hints. First, he recommended tracking skill sets against company strategy with the use of a matrix. Secondly, outside firms can be incredibly helpful in finding qualified and independent directors. Finally, the recruitment of a few high profile names to the board was important. Krol emphasized this last recommendation because many directors want to learn from other experienced directors.
In response to Hallagan’s first question, Thomas stated that finding experts in their relative fields was essential. His board required experienced directors in the fields of bankruptcy, real estate, financial statements, and others to properly oversee the company’s responsibilities. Additionally, he said good directors have the time to contribute and be invested in the work that needs to get done.
Crawford faced a challenge of finding 15-18 new directors to serve on three boards after his company, ITT, split into three. During this time, he learned that success in creating a high-performing board was driven by finding a blend of people with the right skills and experiences. The best boards, according to Crawford, have a diverse group of individuals from a variety of sources. Krol added to this last point by saying that a skill set and strategy matrix should include a diversity aspect. If not, he argued, a board will have a problem down the road.
Hallagan then posed a new question to the panelists: “How do you use the talent around the boardroom?” While each panelist had some opinions on the matter, three main points emerged: Know the company, put the right people in the right positions, and measure performance. Each panelist instructed that knowing about the company was more than just sending a new director to one of the manufacturing plants. Rather, it was a long-term study of the corporation with in-depth education sessions by members of management. Additionally, directors should be matched with committees suited to their respective skill sets. Finally, the board must be measured against goals it sets out for itself every year.