Ken Daly, NACD president and CEO, is featured on CEO Talk Radio discussing the role the board plays in helping to shape and refine a sustainable strategy. Directors play a key role by selecting the right CEO for the company’s future, and by working with the CEO and senior management to revise the strategy as the company’s situation evolves. Monitoring execution of the current strategy is another key role, according to Daly.
As Daly explains in the interview, there is a powerful relationship between exemplary board performance, sustained profitability and job growth. Directors serve as fiduciaries for shareowners, but not merely for the short term; boards serve owners best by focusing long-term on corporate performance and growth.
The board’s strategy role extends to the function of the board and the way board meetings are conducted. The most effective meetings focus on actionable items, with agendas set to allow for dialogue about key issues. Between meetings, directors can complement management information by conducting their own research. Board members also need to listen to shareowners to understand their concerns and, in turn, help them understand what the company is doing. (Note: In face to face meetings, directors need to ensure that they speak with one voice and comply with Regulation Fair Disclosure.)
NACD has a number of resources available, including white papers, blue ribbon commission reports and surveys, to help directors and boards navigate their roles and deliver value for their companies. NACD also hosts a number of conferences and forums around the country where board members can learn best practices from corporate governance experts and leading directors, as well as network with other directors and boards.
Fifty years old and I still haven’t kicked the habit of the end-of-summer book report. Sad really.
I must admit I didn’t think that Steig Larsson’s first thriller would provide food for NACD thought, but listen up all you private company directors, nomination and governance chairs worried about CEO succession, and anyone concerned with boardroom ethics and director independence. This book review is for you.
He died before his trilogy of crime stories became best sellers.
He was Swedish.
He was a former journalist who was expert in covering right-wing extremism.
It is not known how much he knew or cared about fiduciary responsibility or the governance practices of the best-run family businesses, and midway through the book it becomes obvious that the corporation and the magazine company around which most of the action is set, have not based their governance practices on the NACD Key Agreed Principles. Sure, both are private (not public) companies and being based in the frozen north of Sweden and in Stockholm respectively, are not bound by U.S. law. Nonetheless, the conditions under which old man Vanger joins the magazine company board, and the threats subsequently made to the company co-founders, would raise the eyebrows of anyone with even a rudimentary knowledge of the Duty of Loyalty. Transparency is not a core value and self-interest rules the day.
The Vanger family who run the company—and, indeed, the community at the heart of the book—would benefit from attending the family business session at this year’s NACD conference. As usual, the session will be facilitated by Jack Moore, a member of the Benjamin Moore Paint family and well-seasoned in helping directors and executives of family-run companies deal with some very sensitive interpersonal issues. Jack will be joined by Linda Thomas, the CEO of Wilcox Farms, an egg distribution company based in the Pacific Northwest. Chris Wilcox, one of the family members now involved with running the 100-year-old egg farm, will be there too. This will be textbook—not crime thriller—corporate governance, but the panel have promised some lively stories even if they can’t manage mystery and intrigue. Don’t miss it.
Later in Larsson’s novel (and I must be careful not to give away the plot) there are serious questions about who should lead the Vanger empire, although the old man is still very much alive at the end of the story. It all comes out all right in the end, but there’s no doubt that their succession planning and executive evaluation process was sadly lacking. The company counsel, Frode, is pretty much a good guy throughout, but really questions must be asked about the board process and how he allowed it to become so compromised. HealthSouth director and law professor Charles Elson, Heidrick and Struggles’ Bonnie Gwin, and Peter Wiley, chairman and former CEO of Wiley and Sons, will discuss C-suite succession planning at the NACD Conference. Join them to find out how it should be done.
And if a girl with a dragon tattoo offers to invest in your latest venture, give her a wide berth. I have reason to believe her fortune was not made honestly.
Dr. Reatha Clark King, a member of the NACD board and a former longtime director of Exxon Mobil, agreed to be filmed recently for a new product NACD will launch in fall 2010. Anyone who has had the joy of hearing from Reatha will know that her grace, passion for quality and excellence, and her wisdom shine through every word she utters. Luckily she is not short of words.
Reatha is a research chemist who was part of the space program in the 1960s. Her job? To make sure rocket fuel really had the firepower needed to get America, if not to the moon and back, then certainly into orbit. In the research labs of the National Bureau of Standards the young Dr. King learned how to test hypotheses, ask questions until she was sure of the answer, and manage risk—skills that have served her well in her subsequent work as a director.
I asked Reatha to share her thoughts on why leaders from all walks of life should consider board service. Our self-study, multimedia program is called “How to Be(come) a Director” and is intended primarily for C-suite executives who are on the brink of board careers, and so it’s possible that many of you are too experienced to ever sign up for it. That would be a shame, because I think even the most grizzled and world-weary director would learn something from Reatha’s response. Here, just for you, is a sample of what she said. Enjoy—and be glad American entrepreneurialism continues to benefit from her judgment and commitment, day in and day out.
How to Be(come) A Director will be available from NACD in the fall. Don’t miss this chance to explore director responsibilities and rewards with some of America’s leading governance experts—directors who can lead the way for you.