The recent NACD Directorship 100 Forum brought together more than 300 governance experts, C-suite executives, journalists and corporate directors from around the country to share insights on the most important issues facing boards today.
For those attendees weathering global economic uncertainties for their organizations while mitigating media and public scrutiny, the importance of good governance in today’s business world could not be stressed enough. This year’s B. Kenneth West Lifetime Achievement Award Winner, Jon F. Hanson, founder and chairman of The Hampshire Real Estate Companies and chairman of HealthSouth, might have summed it up best when he explained that he looks at his role in the boardroom as being a “part-time job with full-time responsibilities.”
The responsibilities tied to a directorship cannot be understated. Through the forum topics, which ran the gamut from “Building a Better Board” to “Audit Committee Hot Topics,” NACD worked to ensure that directors came away from each course with added insights from peers who are moving the ball on strategy and leading the way in governance.
Each D100 session was tailored to provide maximum value to attendees. Designed by directors for directors, they offered specific insights into not only what is expected of a boardroom leader, but also how to go above and beyond the minimum expected requirements. Promoting this type of exemplary board leadership has always been one of NACD’s explicit goals, and the D100 Forum used every opportunity to highlight those who continually work to enhance the professionalism of those in the boardroom, maximize shareholder value and supply confidence to investors.
This type of open exchange by governance leaders is one of the factors that make NACD education events so valuable to real world directors. New directors and those with decades of board experience can all find something to take away from these events.
Given the turbulent economy, managing risk oversight shone through as one of the major themes at this year’s event. Forum host WilmerHale provided expert insights on avoiding the high-profile missteps that can consume boardrooms, using real world examples and instances where crises could have been averted and good governance maintained.
Meanwhile, forum discussions, such as “Corporate Strategy and Sustainability: Driving Long-Term Value,” focused on how directors can look beyond financial metrics and learn how “responsibility” and “sustainability” are key in driving long-term shareholder value.
Thanks to all who made this event such a valuable resource for our community of professional directors, and we look forward to seeing you at next year’s D100 Forum.
Solange Charas is the president of Charas Consulting, Inc. and a senior-level human capital professional with 20-plus years of experience as corporate CHRO and consulting firm practice director. She is currently pursuing her doctor of management at Case Western Reserve. She has served as the chair of the remuneration committee for a NASDAQ-traded company.
Michael Roberto, author of Know What You Don’t Know: How Great Leaders Prevent Problems Before They Happen, shared his insights with the 200 directors who attended last week’s NACD Directorship Forum in NYC. He explained why it makes more sense to concentrate on “problem- finding” than “problem-solving.” Practicing problem-finding helps leaders spot and address emerging concerns while they are still manageable and before they turn into disasters. It is a vital board skill.
Roberto opened his talk with examples from the Cuban Missile Crisis and recounted his conversations with Robert McNamara about that perilous time. He also gave examples from the 2003 NASA shuttle failure from his interviews with then Space Shuttle program manager, Linda Ham. Using these two examples he illustrated the fundamental value of actively seeking out problems before they find you.
I think his presentation had the attention of the audience—there was something seductively compelling about the idea of using proactive techniques to anticipate and avoid dangerous problems. Yet, despite our intellectual agreement that being proactive is always more effective than being inactive or reactive, what’s the trick? How do we set about successful problem-finding?
Roberto offered these seven steps to becoming a proactive problem-finder instead of a reactive problem-solver:
Circumvent the gatekeepers – get unfiltered information.
Become an ethnographer – watch what your constituents are doing and stay alert to what’s happening in the periphery. Watch for “Hirschman’s exit” or “voice” phenomena;
Hunt for patterns – try to draw on past experiences but don’t get caught in the trap of misusing analogies.
Use intuition to “connect the dots;” lessons learned from small problems can contribute to understanding the path of large problems.
Encourage innovative thinking and risk-taking on a small scale – piloting programs and experimenting may be the key to learning. “Fail often, succeed sooner.”
“Watch the film” – what is your team and the competition doing? “Adopt the military’s “After Action Review” (AAR) process to learn and improve;
Create a climate of information-sharing – encourage people to speak up and have a mindset of “openness.”
In my opinion, our shareholders and stakeholders expect us board members to do our best to steward the organization. To do that, we need to listen to our inner dialogue to understand what can inhibit our participation in important activities. What can cause us to abdicate our leadership role? Is it fear that we may be viewed as pariahs and shunned if we voice a dissenting opinion? Do we feel safer if we ignore an issue? Like the Ravenous Bugblatter Beast of Traal in Douglas Adams’s Hitchhiker’s Guide to the Galaxy, do we believe that if we can’t see the problem, then it can’t see us? Or do we assume that someone else will tell us about the problem when it get big enough? All perilous pitfalls—which might be avoided by practicing problem-finding.
Read more about the NACD Directorship Forum here and here.
To reserve your seat for the NACD D100 Forum, November 8-9 at the Waldorf Astoria, NYC. Sign up to learn from Jet Blue director General (rtd) Stanley McChrystal, Polymer Group CEO Ronee Hagen and HealthSouth CEO Jay Grinney among others, and be our guest at the gala dinner celebrating the NACD D100 and Director of the Year honorees.
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.