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What Is the Job of a Director?
A proposition elegant in its simplicity: Choose the right CEO, and then make sure he or she doesn’t “muck things up.”



When I became editor of Directors & Boards in 1981, an executive who shall remain nameless -- simply because after a quarter of a century I can’t remember who it was (oh, how the memory goes with age!) -- said to me, “Jim, the job of a director is to make sure the right guy is running the company.”

My reaction was: That can’t be right. Surely there is a whole lot more to being a director and doing what a director does. Well, the subsequent years in the governance trenches have tempered my initial recoiling at that fellow’s board philosophy. I’ve come to the realization that maybe he was right.

And here’s why: If you get this big job done -- i.e., making sure that the right person (as my board expert would say it today) is in the top spot -- then everything else is likely to fall right in line in a good way for the board, company, and shareholders.

Not that you don’t have continuing concerns and a whole raft of ongoing duties and accountabilities. But when you’ve done the hard work of getting into the corner office a CEO in whose character and capability you have utter confidence, then you’ve done job one of being a director.

Master banker and board leader Walter Wriston put this to me in another way when I interviewed him in 1986, two years after he had retired as chairman of Citicorp. He and his board went through a delicate succession process. I was chatting him up for the 10th anniversary special issue of Directors & Boards, and when I raised the issue of the board’s role in succession planning, he stated unequivocally, “The first duty of a director is to fire the CEO if he isn’t performing. When I was recruiting directors for Citicorp, that’s the first thing I said: ‘Your primary function is to kick me off if we’re mucking it up.’”

More wisdom on picking the right person for the top spot will be found in the Boardroom Briefing on “CEO Succession Planning.” This is the second in a series of special reports jointly produced by Directors & Boards and the National Association of Corporate Directors. See below for further details.

And for more wisdom from Wriston, who died earlier this year, I’ll share with you a copy of my interview. As with the Lewis Platt article referenced in the last issue (which many D&B e-Briefing readers requested), the Wriston interview preceded the digitalization of our article archives. But I have a PDF of an abridged version of the interview, which is being featured in the Second Quarter 2005 D&B, mailing to subscribers in mid-April. Please e-mail me with your request. And all D&B subscribers should keep an eye on their mailbox for a copy of the Boardroom Briefing soon to arrive.

Jim Kristie is the editor and associate publisher of Directors & Boards.

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By Beverly Behan

Serving on a board of directors today means investing more time and effort in the board’s affairs than ever before. Consequently, before saying “yes” to a board invitation prospective directors are doing more due diligence than ever.

What follows are some things you can do to get greater insights about any board that you are invited to serve on -- ideas that have been helpful to other directors in making board choices.

Conversations with the CEO and Other Board Members
The concept of an “interview” to join a board was unheard of in earlier days, when boards consisted of close friends of the CEO, who casually invited them to become a director. Today, most nominating and governance committees, which now lead board recruitment efforts, would never consider recommending a director candidate without having that candidate meet with the CEO, the lead director (if there is one), the chairs of the nominating and governance committees, and sometimes other board members as well.

These discussions are an equally important, if not more important, part of your own due diligence in deciding whether or not to join this board.

• Discussions with the Chief Executive Officer. Your conversation with the CEO will probably be pivotal to your decision. Most directors decide whether or not to join a board based on their impressions of corporate leadership. Your conversation will undoubtedly focus on the CEO’s vision for the company -- key strategic objectives and challenges.
  
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Announcing a New Board Member
Companies should treat the appointment of a new director as an opportunity to convey a strategic message to the market.

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Editor's note:  Each month, we ask a Directors & Boards reader to comment on critical issues facing directors today.  If you'd like to participate in this section in the future, please email Scott Chase. 

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Boardroom Briefing:  CEO Succession Planning

Countrywide Financial Corp. 
Kathleen Brown
Managing Director, Head of West Coast Region
Goldman Sachs & Co.

In present position since 2003. Joined Goldman Sachs in 2001, where until 2003 she managed a $2.5 billion portfolio in its private wealth management group. Previously held various executive management positions at Bank of America Corp., including president of the private bank. From 1991-1994 served as treasurer of the state of California, responsible for a $26 billion investment portfolio and in 2004 was the Democratic Party nominee for governor. Formerly was with the law firm of O’Melveny & Myers LLP.

Countrywide is a financial services holding company. Revenues are $9 billion. Goldman Sachs is an international investment, banking, securities and investment firm. Revenues are $30 billion.