Our 1,300 attendees represented just about every state, 15 countries, and nearly 30 percent of the Fortune 1000. And 60 percent were “Summit regulars”—they keep coming back for more.
Couldn’t join us live? We’ve got the ultimate recap (in no particular order). Here’s what you missed.
Dancing With the Start-Ups
We no longer live in the Mad Men era, when several large brands dominated a particular industry. Start-ups are changing the business landscape and the ways in which we live and work. In partnership with KITE and KPMG, Dancing With the Start-Ups was a competition that invited 12 promising start-ups in three industries to pitch their company in four minutes—and the winner received a prize package worth $30,000. Read this press release to find out who won.
The No. 1 Risk Your Company Is Likely Overlooking
Conversations about culture risk dominated the Strategy and Risk Board Committee Forum and other breakout sessions. Discussions focused on red flags, establishing a stronger onboarding process, and concrete methods for fully engaging board members in their duties as directors.
Diversity was not only embodied and discussed during its eponymous half-day Symposium—which focused on the realities of unconscious bias, building the twenty-first century board, and unlocking innovation through diversity—but also was enhanced by the diverse industries, attendee experience levels, and types of companies represented at the Symposium, as well as the learning formats, input, and content of each session throughout the entire Summit.
Back by popular demand, this session was standing room only. Whether you were seeking your first board seat or your fifth, “Landing Your Next Board Seat” offered practical takeaways for directors at all career levels.
“Society needs financial wealth . . . but it matters how you make the money,” said Rajendra Sisodia, cofounder and cochair of Conscious Capitalism Inc., and director of the Container Store Group. “Businesses not only create—they can destroy financial wealth, as well.” This keynote by Sisodia was followed by lively discussions on how to develop a higher-ambition board.
Exclusive Opportunities for NACD Fellows
To recognize NACD Fellows (479 in attendance!), several special events were held, including a reception that offered a sneak peek of Innovation Nation, exclusive access to content, networking, and a special gift.
Golf Simulation, Virtual Reality, and Georgetown Cupcakes
Here are just a few of the glowing reviews attendees left at the end of Summit.
“Summit was the best ever, by a wide margin. This year, you made it a must-attend event!”
“This is the best conference—I [have attended] every year for four years running—the most innovation, the best new governance ideas, and the best networking. Thank you!”
“Fast paced and exciting! I loved the emphasis on introducing us to innovations happening in the business world today.”
“Thank you for leaning into conscious capitalism and socially responsible business. I’m pleasantly surprised that NACD is so progressive in [its] thinking.”
“NACD has become a thought-provoking forum for the future of business. Governance is important, but is table stakes. Kudos for being on the leading edge of business sustainability and disruptive strategy.”
Like what you’ve heard?MARK YOUR CALENDAR AND JOIN US IN 2017
NACD’s Research team, headed by Director of Research Friso Van der Oord, has been hard at work making changes to significantly enhance how you experience our content. We heard your feedback, and—with our members as our central focus—we’ve released new, practical types of content and reorganized our closets to help you find what you need, when you need it. Let’s begin with our reorganization.
NACD Resource Centers
We’ve curated the best NACD content on the most universal board governance topics in NACD Board Resource Centers. These resource centers include our best thought leadership, most practical tools, recent expert analysis, and upcoming events. Their content gets refreshed monthly. We now have resource centers available on the following topics, with more to come in the next 6 months:
In addition to Resource Centers, NACD also debuted its Board Insights Portal in the last year. Here, you can find our most recent publications, blogs and articles.
This page also features three drop-down menus that allow you to search for our research and insights by committee type (for the three traditional committees), by topic, or for benchmarking data by company type.
Among the publications you’ll find in our Resource Centers and Board Insights Portal are a new publication type called our Director Essentials series. This new series offers “essentials” guides for boards on key governance issues, outlining core responsibilities of boards, tactics they can adopt to strengthen oversight and questions they can ask to inform the dialogue with management. Topics include:
A cross-departmental team of NACD staff have also worked to improve our website’s search function. We cleared out our old or redundant pages and ensured that our most relevant content appears when you search your favorite governance terms on our site. So now, if we’ve published it, you can more easily find it.
What This Means for You
We hope that these changes will help you and your board to better identify specific resources to frame your boardroom discussions, diagnose an issue, and outline possible solutions. We only ask that you continue to provide us with feedback about your experience finding or using our content. Please offer your comments below, or send an email to me (AMOrme@NACDonline.org) or Friso (FVanderOord@NACDonline.org).
You may also click here for more information on how to gain access to NACD’s exclusive boardroom intelligence.
The succession work boards oversee is more complex than it once was. Oversight of the internal talent pipeline has grown beyond a narrow focus on CEO successors to include other internal and external talent. This relatively new role for the board or governance committee demands the hands-on ability to assess upper-management aptitude and readiness for the top job.
On September 21, the NACD Atlanta Chapter invited three exemplary former CEOs who serve on public boards to advise Atlanta-area directors on how to navigate this more demanding process. The panel, moderated by NACD President Peter R. Gleason, was comprised of Richard Anderson, previously CEO of Delta Airlines, and member of the Cargill and Medtronic boards; Martha Brooks, former CEO of Alcan, and director of Bombardier and Jabil Circuit; and Frank Blake, former CEO and chair of Home Depot, and currently a director at Delta Airlines.
For context, CEO turnover within the world’s largest 2,500 companies has increased in recent years, according to a 2016 study by PwC titled 2015 CEO Success that analyzed CEO turnover data from 2015 in the U.S. and around the globe. Among the study’s findings were the following data:
CEO turnover around the globe reached a record rate of 16.6 percent.
In North America, the rate of CEO turnover was 14.3 percent.
Planned turnover accounted for 10.9 percent of all turnover indicated in the study.
Force-outs were reported at 3 percent.
CEO turnover triggered by mergers and acquisitions occurred at a rate of 2.8 percent globally and in the U.S.
Looking specifically at U.S. turnover data, of all CEO turnovers, 4.4 percent were planned and 2.2 percent of the CEOs were forced out.
The traditional tactic when seeking new CEO talent has been to “go inside” for the most qualified internal candidate, but boards are now deliberately bringing in external CEO candidates. When the same PwC study compared statistics from 2004 to 2015, the percentage of outsiders hired as CEO increased from 14 percent in 2004 to 22 percent in 2015—a 50 percent increase in external hires in 10 years.
Hiring an outsider to serve as CEO was once seen as a last resort—something that typically only happened when a board had to force out the incumbent CEO suddenly, had failed to groom a suitable successor, or both. In recent years, however, more companies have chosen an outsider CEO, and frequently as part of a planned succession.
The stakes are higher. The process is more transparent and invites activist investors, pundits, and media to scrutinize a company’s process and its decision. Often the current CEO is left somewhat in the dark about the progress and the remaining leadership team may just not know status, which leads to uncertainty and process dysfunction.
The distinguished panel offered these nine valuable lessons learned about successfully navigating this board responsibility.
Succession must be a CEO-driven process. The panelists urged that a board place the CEO in the middle of the succession process but not as a direct party to the final decision process. They argued that the current CEO brings unique knowledge and passion for the future of the business, and that he or she wants a leadership legacy that includes a smooth and smart transition to a new CEO. The CEO also knows the internal talent pipeline better than any director, which could be an asset to the board. The panel added that with the board’s involvement and perhaps that of external resources, the risk of the “favored son” effect could be mitigated.
Succession is a full-board endeavor. Ownership of the process, knowledge of internal candidate development, insight into what could potentially derail the process, external benchmarking, and strategic issues that await the new CEO are matters for the full board to address. Committees can execute on specific tasks but the work, insight, and decision-making process related to CEO succession must be owned by the full board.
One committee member urged every board member to meet and assess final candidates against a written success and impact profile during lengthy one-on-one interviews. The panel expressed their belief that the successful candidate would develop a sound, unique relationship with each director. Panelists also perceive interviews as the gateway to relationship building and ultimately to the CEO being accepted into the board’s inner circle.
The lead director plays an integral role as mentor. The board’s succession method needs a quality control focal point, or someone who will manage group processes among directors so that the “loudest voices” around the boardroom table are not those that necessarily carry the most weight. The panel suggested that the board could task the lead director with this quality-control leadership.
Remember that the board’s loyalty belongs to the company—not the current CEO or internal candidates. The board needs and values input from the CEO and there may be internal candidates who are highly regarded. But decisions must be based single-mindedly upon duty-of-care philosophies—the company’s future.
Competition among internal candidates must be monitored and managed by the CEO and board. Internal candidates should be explicitly informed or they are likely to figure out whether or not they are a candidate for the CEO role. With that information or suspicion, a competitive “horse race” may begin and performance may peak. There is also the inevitable dysfunction that can occur between the contenders as well as their organizations as they “bid up” their candidacy. CEOs and lead directors may intervene to manage negative behavior, and reinforce that senior-level performance is a collective effort. Compensation schemes for these candidates should be aligned in the spirit that “we all row the boat together.”
Get a written exit report from the outgoing CEO. Have the CEO personally develop a lengthy perspective about the future focus of the business and the CEO’s most critical areas of personal attention. Develop an “issues list” of those matters that the new CEO will likely bump into in the market, inside the company, and with regulators. Ensure the list is heavy on issues and light on recommendations. Finally, ask the outgoing CEO to list what strategic items and enabling matters must be done by the incoming CEO.
Develop a plan for easing out a reluctant CEO. The chair or lead director must have a “personal legacy” discussion with the CEO, and the CEO will inevitably get the message that it’s time to transition, and yet the panel emphasized that this should be a clear—not a nuanced—discussion. Have a plan for how and when the cord will be cut and communicate that plan clearly.
Define how unsuccessful transition candidates will be treated. If these executives can see a good path forward, embrace them. If not, help them leave, and do so quickly.
With a C-suite succession event, corporate strategy is likely to change. The board should endeavor to ensure that a sound corporate culture makes it through the transition.