NACD Chairman Emerita Barbara Hackman Franklin introduced the first keynote speaker of the day: former Sen. Olympia J. Snowe (R-ME), who is also a director of T. Rowe Price Group Inc. and Bipartisan Policy Center. With the government shutdown continuing, Snowe offered an insider’s perspective of what’s causing the lack of bipartisanship in Congress and the likelihood of Congress and the president reaching agreement on long-term fiscal and regulatory issues.
Snowe has first-hand experience in navigating a government shutdown in Congress—her first year in the Senate was 1995 when the last shutdown occurred. She noted that during that time a bipartisan coalition of senators convened to come up with a balanced budget. “We had to show we could collaborate,” Snowe explained.
The culture of collaboration appears to be moving slowly in the current Congress. Divides over entitlements, spending, debts, and the Affordable Care Act (ACA) have all contributed to the government stalemate. “It’s mind-boggling that Congress would cost this country $300 million in terms of economic output with this shutdown,” Snowe said. “It creates an atmosphere of uncertainty.”
Growth of Partisanship
Why is it so difficult to achieve bipartisan harmony? Snowe notes that part of this is because red states keep getting redder and blue states keep getting bluer. “There is no incentive to working across the aisle because of the risk of being opposed in primary elections,” she said. “We are more polarized in this moment than we have been in 134 years.”
While many may have hoped that recent past events, such as the fiscal cliff and the debt-ceiling crisis of 2011, would have been lessons learned to prevent Congress from dragging America through another economic upheaval, it doesn’t appear to be the case. “The Democrats and the Republicans are like two ships passing in the night—one in the Atlantic and one in the Pacific,” Snowe said.
Ending the Stalemate
Snow said attaching the ACA to government operations is not achievable nor is it a winning strategy. She said the key is to reopen government and pass the debt-ceiling increase. “It’s astonishing that some members of Congress truly believe defaulting on our credit as a country wouldn’t roil the markets,” Snowe noted.
She suggested that open communications among leaders will be significant. “This is a transcendent moment for our country,” she explained. “Congress and the president must communicate; they can’t operate in parallel universes.”
But communication among government leaders is just one piece of the conversation. Directors—and the public at-large—also have a duty to speak up. Snowe suggested utilizing social media and online technologies to communicate actively as one approach. “We have the responsibility to make sure Congress becomes the solution-driven powerhouse it once was using the same approach as our founding fathers: advancing decision making through consensus,” Snowe said. “We can’t afford to institutionalize this culture of winning at all costs.”
The last day of the 2012 NACD Board Leadership Conference is packed with panels of leading minds in business. Managing Director and CFO Peter Gleason opened the day by introducing a session on the new Blue Ribbon Commission Report on board diversity, released to attendees yesterday.
The session, moderated by NACD Chairman Barbara Hackman Franklin, featured two of the commission’s co-chairs: Curtis Crawford, president and CEO of XCEO; and Cari Dominguez, the former chair of the U.S. Equal Employment Opportunity Commission and director at Manpower. The panel also included Commissioner Solomon Trujillo, corporate responsibility chair at Target and Bonnie Gwin from Heidrick & Struggles.
Franklin, also a commissioner, provided an overview of the report’s highlights. First and foremost, diversity in the boardroom is a business imperative–a means to competitiveness. A board’s performance relies on knowledge of the company and its operating environment. As such, board composition should reflect the company’s stakeholders, particularly employees and customers. While each board will approach diversity differently, the report outlined four tasks that are essential to any process:
1. Review and evaluate board composition.
2. Expand horizons for seeking candidates.
3. Improve director evaluations.
4. Preserve, enhance, or consider adding tenure limiting mechanisms.
The panelists went on to discuss the business case for board diversity. According to Crawford, to have the best board, it is necessary to seek out the best talent available. To find where the best talent resides, the board should not limit itself to only seeking certain dimensions. Dominguez agreed, noting that diverse demographics represent an increasing segment of purchasing power. However, just as ketchup and salsa are both popular condiments, including diversity in boardroom composition “does not shrink the pie, it grows the pie.”
From his experiences as a business leader globally, Trujillo observed that differentiation and diversity are critical in obtaining a competitive advantage. “Directors have a fiduciary duty” to place diversity as an item for discussion. From the vantage point of an executive recruiter, Gwin noticed that at companies that embrace diversity, it is advocated for by the CEO and the most senior independent director.
“You’ll have to get on your dancing shoes” said Donna as we watched the Dancing with the Stars finale the other night, and I must admit a shudder ran through me.
“What do you mean?” I asked, worried that she was going to suggest a Latin salsa class or sign me up for the square dance squad at church. My toes refuse to twinkle and I am to ballroom dance what hippos are to hip hop.
Hines Ward. He's no Ken Daly
“Well, I see the NACD conference site is open for business” said my wife “and you know how quickly your dance card fills up every October in DC.”
She’s right. Our conference has sold out for the last two years and we’re expecting more than 800 directors at the JW Marriott in Washington, DC from October 2-4 this fall. It’s great to see chapter leaders, members I first met at roundtables or education events, Board Leadership Fellows and our own NACD board, but it sure is hard to find time to take a turn around the floor with everyone—and to break in on all the interesting networking conversations going on left, right and center.
Conference is like a cotillion, and at all hours of the day and night board members from companies big and small, public and private, from all over America and, increasingly, all over the world, are in constant, swirling motion. You’ll definitely need your comfy shoes.
Like everyone else who makes certain to attend, I like to catch as many break outs as possible. There are 24 this year and it takes the speed and stamina of Maksim Chmerkovskiy to run between them. One definitely not to miss: Bonnie Hill from the board of Yum Brands, Jim Brady from the board of Constellation Energy, former Governor Bill Owens from Colorado at the time of Columbine, and communications guru Richard Levick talking about the board’s role in crisis planning and management in the year of the beef taco, Fukushima and political volatility all over the world.
We have a full day of programming on Sunday this year: plan to attend one of five board committee forums or get to know fellow directors by joining our special private tours of the Capitol or the National Archives.
Sir Peter Bonfield
As I write, Sir Peter Bonfield, who has contributed a lifetime to driving international technology innovation and who now sits on the board of Sony Corporation (among others) has agreed to join the opening plenary on Global Governance with Ambassador Roz Ridgway and our board member Michele Hooper (who Sir Peter knows from the board of AstraZeneca) . It’s a small world—although The Honorable Barbara Hackman Franklin and The Honorable Charlene Barshefsky may beg to differ. They’ll be sharing their view from 30,000 feet on one of the rare occasions when they are not in the air flying to China or other far flung hot spots.
Members of our latest Blue Ribbon Commission on Effective Lead Directors will take the stage as will The Honorable Leo Strine from the Delaware Court of Chancery. As usual, you won’t be able to turn around without bumping into a big name from the business world or someone from the Administration or the Hill. As always, thanks to our fantastic line-up of sponsors who make it possible for us to offer you an event of this size and scale.
I am looking forward to meeting Medco director Myrtle Potter who is based on the West Coast and catching up with Chris Kubasik, President and COO of Lockheed Martin and a board member at USO—an organization that I am sure is close to all our hearts. I know you will have your own “dance card” of movers and shakers in the world of governance. Just remember, you can’t be part of the fun if you don’t make it to the ballroom floor. Register now and I look forward to seeing you twirl by in the middle of all the excitement this October in Washington DC.