Tag Archive: boardroom dynamics

Through the Boardroom Lens

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Directors attending the recent NACD Directorship 2020® event in Denver, Colorado engaged in group discussions about how boards can anticipate and effectively respond to environmental and competitive disruptors in the marketplace.

The half-day symposium at the Ritz-Carlton on July 15 was the second of three NACD Directorship 2020 events this year addressing seven disruptive forces and their implications for the boardroom. Summaries of the Denver speakers’ main points are available here.

Following each speaker, directors developed key takeaways for boards. Those takeaways fell within the parameters of the five elements of effective board leadership defined at last year’s NACD Directorship 2020 forums: strategic board leadership and processes, boardroom dynamics and culture, information and awareness, board composition, and goals and metrics.

Environmental Disruptor Takeaways

Strategic Board Leadership and Processes

  • Crisis response plan. Ensure that the company has a contingency plan in place that takes into account a potential environmental crisis. The plan should include how the company will respond to disruptions in the supply chain and production cycle, as well as to employees, customers, and investors.

Boardroom Dynamics and Culture

  • Culture. Boardroom culture should reflect that directors are ready and willing to be held accountable for environmental or climatological issues that arise for the company.

Information and Awareness

  • Engagement. The company should have an established communications plan to use in response to requests from shareholders and stakeholders regarding environmental matters.

Goals and Metrics

  • Green metrics. Becoming a sustainability-focused company requires adopting a long-term commitment to the cause. The board can communicate that commitment by establishing environment-related performance metrics that align with the corporate strategy.

Competitive Disruptor Takeaways

Strategic Board Leadership and Processes

  • Board agenda. Set aside time on the board agenda to discuss forward-looking strategy, so that the board’s focus is not limited to reviewing the company’s past performance.

Boardroom Dynamics and Culture

  • Culture. Fostering innovation requires risk. The culture throughout the organization should support failure and risk taking within the company’s tolerances. Also invite outside experts—or “white space” teams—to help trigger new, innovative thoughts.

Board Composition

  • Composition. Board composition should reflect a diversity of thought and experience. Regardless of background, directors should be willing to ask probing questions and stay aware of marketplace trends.

Goals and metrics

  • Understanding the marketplace. Management should be able to answer who future competitors might be and what trends might gain traction.

Learning to Lead at Board Level: Tom Presby speaks at NACD Director Professionalism

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Eighty-five directors spending two days at NACD’s Director Professionalism® course in a chilly Florida this week benefited from a thoughtful talk from experienced audit chair Tom Presby. Tom leads the audit committee for Tiffany and Co. and American Eagle Outfitters, and serves four other boards, as well.

“If you are invited to join a board, do the due diligence you would do if you were actually buying the company,” he said. “Get to know the other directors and assess the culture of the board and the company. Your board colleagues and the management they oversee will, in effect, be holding your wallet in their hands.”

Tom believes that there is often a connection between company culture, risk management and company performance. “Are people afraid of the boss?” he asked. “Is it ‘make plan or die’? These are potential symptoms of a dangerous culture.” Other red flags to look-out for, he said, are a tolerance for sloppiness, short-term people making long-term decisions (“If they won’t be charged with delivering it, don’t let them decide upon it”) and lack of follow-through on strategy.

Once you accept your board seat, Tom urges, make time to visit operations to take the pulse of the company, and do your best to attend all the committee meetings of the board, supplementing your industry knowledge and particular expertise with a solid grounding in all the issues bubbling at board level.

Protect your independence fiercely, Tom advises, and don’t be afraid to reject the advice of the general counsel, or even make the CEO impatient. When in doubt, ask the second question. “It’s what you’re there for,” he said. “It’s good to be collegial and supportive, but don’t make friends who’ll be offended when you do the job you’re there to do.”

Above all, Tom said to take time to educate yourself on boardroom issues, for you can never know enough. He walks his own talk. He is spending this afternoon at a finance session for board members. Not leading it, but sitting at the back of the room, taking careful notes. If you would like to know more about NACD’s Board Leadership Fellowships, educating directors to be exemplary board members, please contact fellowships@NACDonline.org and check out upcoming Director education courses here.

Judgment, Values and Integrity

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Norman Augustine

Norman Augustine

“Wow. In the past sixteen minutes I learned everything there is to learn for an MBA!” Thus spoke NACD President and CEO Ken Daly, in response to panelists Ken Duberstein (former Reagan chief of staff)  and Norm Augustine (retired chairman and CEO of Lockheed Martin) expounding on their philosophies of “Courageous Board Leadership,” on the final morning of the annual NACD Corporate Governance Conference.

Augustine’s philosophy is straightforward: “Find quality people, tell them what you want, and get out of the way.” Quality people are those who have “enthusiasm, intelligence, and respect for others.”

The Honorable Kenneth M. Duberstein

The Honorable Kenneth M. Duberstein

Duberstein said that “a good leader empowers those around him to do their jobs better.” Leadership, he said, is “judgment, values, and integrity.” A good leader seeks “people who are independent but loyal to the mission.”

All panelists agreed that “professional skepticism” applied in the appropriate way, is healthy to the success of any enterprise. All believe that, while it is not necessary to agree with one another, board members should serve in a collegial fashion, get along, and respect each other.