Tag Archive: Michele J. Hooper

Skepticism Lessons Learned

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I’ve always been a trusting soul. One of my earliest lessons involved me diligently removing debris from a stream for someone in exchange for the official deed to the stream. The problem was, he didn’t own it.

I did not possess the skill of skepticism—defined in Audit Standard (AU) 316 as “an attitude that includes a questioning mind and a critical assessment of … evidence.” If I had, I would have observed that the shiny gold seal I was given was the kind you can buy at Woolworth’s 5 &10, and that the stream ran not only behind the deedor’s property but contiguous ones as well.

Yet there’s hope for us all. On October 1, NACD launched a unique new webinar series on Skepticism as part of an ongoing Anti-Fraud Collaboration with the Center for Audit Quality (CAQ), Financial Executives International (FEI), and The Institute for Internal Auditors (IIA). Along with many at NACD, I was involved in this exciting project, and had a chance to review the upcoming episodes.

“Skepticism” relates to a search for the truth. The term comes from the Greek skeptikos used some 2,300 years ago by disciples of the philosopher Pyrrhos. The verb skeptesthai means “to reflect, look, view.” The earliest self-declared skeptics emphasized the importance of the senses in confirming reality. Over time, the word’s meaning expanded to include the notion of reasonable doubt. Today, the “skeptic” is perceived as a doubter—someone who may trust, but must always verify.

It’s an attitude we all need. And perhaps no one knows this better than series moderator Michele J. Hooper, president and CEO of The Directors’ Council, and board member of NACD and CAQ’s governing board. Through questions and comments based on her considerable experience on a variety of public company boards she brings out the best in the six-part series, outlined as follows:

  1. A brief introduction.
  2. The Etiquette and Ethics of Skepticism with Mary M. Mitchell, president, The Mitchell Group, and Bill White, professor at Northwestern University and experienced director.
  3. Professional Skepticism and the External Auditor with Cindy Fornelli, executive director, CAQ; and Greg Weaver, CEO and chairman, Deloitte & Touche.
  4. Skepticism and the Audit Committee with Marty Coyne, lead director and audit committee member, Akamai Technologies; and Ken Daly, president and CEO, NACD.
  5. Skepticism and the Financial Executive with Marie Hollein, president and CEO, FEI; and Greg Kabureck, chief accounting officer, Xerox Corporation.
  6. Skepticism and the Internal Auditor with Richard Chambers, president and CEO, The IIA; and Paul Sobel, vice president and chief audit executive, Georgia Pacific.

In addition to these webinars, NACD will release a white paper with in-depth background and additional resources on skepticism in December.

Why skepticism? It’s a great way to break the fraud triangle—composed of incentive, opportunity, and rationalization—which can cost businesses so dearly. Financial reporting fraud, the focus of this series, is responsible for a significant percentage of the $3.5 trillion that businesses lose to fraud every year, according to a recent study by the Association for Certified Fraud Examiners.

The value of the labor I devoted to cleaning out that stream for a fake deed may not be worth much in dollars, but whenever trust is violated the cost is too high.

Fraud is unfortunately a fact of life; therefore skepticism is a skill we all need.

Future-Proofing: Planning C-Suite Succession

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Recently, several companies made headlines after facing dramatic leadership changes. In the current environment, it is critical that directors actively ensure their company has developed a robust executive talent management program. However, according to preliminary data from the 2012-2013 NACD Public Company Governance Survey, more than half of respondents (54.7 percent) classify their company’s CEO succession plans as informal: general discussion, but no formal documentation.

As part of NACD’s effort to share key insights and help boards plan for the future, a session of the upcoming NACD Board Leadership Conference is designed to address this very issue. During the panel discussion, three current directors will share their stories, insights and strategies for future-proofing the C-suite. Slated to speak are:

Kathy J. Higgins Victor, director, Best Buy

Last April, Best Buy experienced a significant executive upheaval when former CEO Brian Dunn resigned amid allegations of misconduct. In May, Founder Richard Schulze also stepped down. The board found themselves in a crisis situation, with two key vacancies to fill in a short period of time.

Higgins Victor, a Best Buy director since 1999, proved to be an invaluable asset to the company. With her extensive experience in executive development, succession planning, and leadership coaching, she served as the nominating committee chair during the transition. During the discussion, Higgins Victor will share the lessons she learned as well as expert insights on effective succession planning.

Michele J. Hooper, director, PPG Industries, UnitedHealth Group, NACD board

Hooper serves on the NACD board of directors and on the boards of PPG Industries, Inc. and UnitedHealth Group. She chairs the audit committee for PPG and the nominating and governance committee for UnitedHealth Group. She previously was a board member of Target Corp., AstraZeneca PLC, DaVita Corp., and Seagram Co. Ltd. She is president and CEO of The Directors’ Council, which specializes in corporate board of director recruitment.

Andrew McKenna, chairman, McDonald’s

McDonald’s faced rapid-fire changes in executive leadership in 2004. Six months after Chairman and CEO James Cantalupo’s sudden death, his successor Charles Bell resigned after being diagnosed with a terminal illness. By the time James Skinner was named CEO in December 2004, the company was well-versed in emergency executive succession.

Current McDonald’s chairman McKenna will discuss how the company worked through this challenging period, safeguarding both corporate reputation and shareholder value. He will provide insights on proactive succession planning and how boards might “future-proof” their companies.

We anticipate a candid and instructive dialogue with Higgins Victor, Hooper and McKenna. Don’t miss out on this CEO succession planning session and the many other invaluable discussions at this year’s NACD Board Leadership Conference, Oct.14-16 at the Gaylord National Resort in National Harbor, MD—just minutes from downtown D.C.