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Are We Asking Too Much of Corporate Boards?
A big question launches Directors & Boards into its ‘Big 3-0’ milestone.

Can one board do it all? Should one board be expected to do it all? Are we asking too much of directors today? Rather than demanding more from our current boards, should we be looking to do some breakthrough conceptualizing of a new model of the corporate board -- and the work of the board?

These are big questions. They are questions that many of our readers may have pondered in a quiet moment, quite possibly during or heading home from an “overstuffed” board meeting. We address these issues in the lead story of the Fourth Quarter edition of Directors & Boards, coming off press in mid-October.

The article is titled “Rethinking the Board.” The author is Yoram (Jerry) Wind, a longtime professor at the Wharton School. His scholarly and practitioner expertise serves our audience well when he challenges the conventional constructs of our corporate governance system.

As you might guess, his answer to the provocative issue of whether one board can do it all is sure to provoke some spirited reaction. His conclusions are carefully reached, and our readers will benefit as we draw upon thought leaders like him to keep us all thinking about how best to order our governing system for forward progress.

This coming edition, by the way, launches Directors & Boards into its 30th year of publication. With this being our “Big 3-0,” you can expect to hear more about how we will be celebrating this publishing milestone with you, our readers. We’re getting an early start with this “Rethinking the Board” issue. We’ll culminate our celebration this time next year with a special 30th anniversary edition that you won’t want to miss. If you’re not a subscriber, you should get your subscription reservation in soon.

Directors & Boards has been a welcome home over these past three decades for critiques of the fundamental structure of the corporate governance system. Here are a few recommended readings, available in the D&B Articles Archive:

• “The Hidden Dangers of Governance Reform”
• “Taking the Measure of Today’s Boards: An Interview with Felix Rohatyn”
• “A Self-Correcting Course for Governance”
• “System Failure, System Renewal”

Question of the Month

Last month, we asked whether you agreed or disagreed with the Delaware Chancery Court's determination that Michael Eisner and the Disney board “did not breach their fiduciary duties or commit waste” in connection with Michael Ovitz’s hiring, termination, and severance package paid. An overwhelming 71.4% agreed with the court's decision. Among the salient comments: 
 
"The court dealt with unwinding a situation and little or no maneuvering space. The problem was created at the time Ovitz was hired."

 "It's really not an issue for the courts. Unfortunately, ambulance chasers and 'something for nothing' shareholders have now focused their extortion on corporations and their boards. Where does it say that all companies/executives/ boards are perfect? No law was broken. Doesn't equity ownership come with risk? Fifteen years ago, when we didn't like the actions of a corporation, we sold or shorted the stock. Nothing has changed other than the onslaught of attorneys creating cases where none exist to collect contingency fees. It's a sad state of affairs."

Now to this month’s question. In the spirit of “Rethinking the Board,” we invite your simple “Yes” or “No” answer -- and any follow-on comments you care to make, of course -- to a profound question:

Is our governance system demanding too much from corporate board members? Click here to take the survey.


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

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Now What? Tips for a Director’s First 100 Days

By Gail R. Meneley and Hugh A. Shields
 

While many companies and organizations have developed board orientation programs, they range from a general “over lunch” chat to a sophisticated briefing on all issues facing the enterprise. In both cases, it is worthwhile for new or first-time directors to design their own “100-Day Plan.”

Consider the following tips we’ve garnered through our own board experience as well as our work with a range of boards from start-ups to Fortune 50 companies:
 
Get to Know the Players
There are two key constituencies that you need to know: other board members and the executive team of the corporation or organization with which you have become involved. Develop a series of questions so that you can gain a broad understanding of the challenges and opportunities facing the organization. Consolidate that input, and listen for discussions on these issues in early board meetings.

Understand the Board’s Priorities
Based on those earlier introductory meetings, do you understand and agree with the board’s priorities and strategic framework? Do you believe that the timeline is realistic and that necessary resources are available? Have you identified your specific competencies that might add to the board’s overall understanding of critical issues?
  
[Click Here to Read the Entire Article]

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What Every Corporate Leader Can Learn from the New York Yankees
How does an organization dominate its industry like the Yankees have done with their legendary 80-year winning streak? The secret is a set of 14 principles applicable to the worlds of business and baseball.

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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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September 25-27, 2005
The Institute for Financial Excellence presents "The Sarbanes-Oxley Conference & Exposition" at the Baltimore Marriott Waterfront Hotel. The educational event will offer attendees insights and expertise from "world authorities on Sarbanes-Oxley." For more information, visit http://www.sarboxconf.com

October 5-7, 2005
The Business Education Network Summit on "Bringing Together Leaders for Effective Business Involvement in Education" will be held in Washington, D.C. Participating companies and organizations include: GlaxoSmithKline, IBM, Business Roundtable, KPMG, Target, and Siemens. Topics include: empowering teachers, closing the achievement gap, promoting math and science competitiveness, and building better business and education partnerships. For more information, contact the U.S. Chamber of Commerce Center for Corporate Citizenship at (202) 463-3133 or visit http://uschamber.com/events/ViewEvent.htm?eventID=409

October 6-7, 2005
Vanderbilt University will host "The 2005 Directors College: Providing Effective Board Leadership in a Changing Governance Environment." The intensive program, offered jointly by the Law and Business Schools, is designed specifically for directors of publicly traded companies, board secretaries, corporate officers, and their advisors. Featured speakers include Paul Volcker, William Chandler, and William Donaldson. Register online at https://www.vanderbiltdirectorscollege.com/register.aspx or call Janis Stewart at (615) 322-0028.

October 19-21, 2005
UCLA's Anderson School of Management presnts the "UCLA Director Training and Certification Program" at the Collins Center for Executive Education, Los Angeles, CA. The program, along with its optional committee modules, brings directors up-to-date on policies and best practices concerning SEC regulations, FASB considerations, NYSE rules and other important issues. The curriculum combines world-class experts with experienced directors and academic thought leaders. For more information, or to register, call (310) 206-7539 or visit http://www.execed.anderson.ucla.edu

October 21, 2005
The Business Roundtable Institute for Corporate Ethics and Wharton Executive Education present the "Senior Leadership Team Ethics Seminar" at The Wharton School of the University of Pennsylvania, Philadelphia, PA. The programboard of directors, chief ethics officers, chief financial officers and other "C-Level" executives as well as vice presidents, general counsels, and corporate secretaries. This full-day, interactive forum challenges senior executives to share best practices and best thinking for addressing difficult ethical issues and to discuss how to embed ethics into business practice. For more information or to register, visit http://www.corporate-ethics.org/seminars/051021.htm or contact Lisa Stewart at (434) 982-2177 or seminars@corporate-ethics.org.

October 23-25, 2005
The National Association of Corporate Directors (NACD) will present its 2005 Annual Corporate Governance Conference at the Renaissance Mayflower Hotel in Washington, DC. This year's theme is "Fortifying Shareholder Relations and the Public Trust." Among other issues, sessions will address how board members can close the "trust gap" by establishing proactive shareholder/stakeholder communication practices. Speakers include corporate directors and CEOs, leading professional advisers, and key regulators and lawmakers. To register or for more information, visit http://www.nacdonline.org

October 26-29, 2005
Corporate Governance LLC presents "The Governance Summit: A Thought Leadership Event for Directors of Boards," taking place at the St. Regis Monarch Beach Resort in Dana Point, Calif. A select group of board members and CEOs will explore best practices in corporate governance, departing from standard academic fare about rules, regulations, and checklists in favor of pragmatic, peer-to-peer roundtables and intimate working sessions focused on today's leading governance issues. Discussions will be moderated by board members, corporate governance advisers, regulators, and other professionals who will share their experiences and insights. More information can be found at http://www.governancesummit.com

October 28-29, 2005
The Society for Industrial and Organizational Psychology will sponsor a Fall Consortium on "Leadership at the Top: The Selection, Globalization and Ethics of Executive Talent." The event will be held at the Westin St. Louis in St. Louis, Missouri. The consortium will bring together leading-edge thinkers to focus on current issues in the selection and development of executive talent. For more information, visit http://www.siop.org/lec

October 31, 2005
CompensationStandards.com conducts its 2nd Annual Executive Compensation Conference, "Meeting the New Standards: What Every Director (and Advisor) Needs to Know - and Do - Now!" It will be held at the Hyatt Regency, Chicago, and via nationwide video webcast. Participating in the event are Stanford Law School's Program in Law, Economics & Business and Harvard Law School's Program on Corporate Governance. The program is ISS accredited for director education. Key speakers include John Reed, Ken West, Warren Batts, Ed Brennan, Michele Hooper, and Ed Woolard. To register, go to https://www.compensationstandards.com/Conference05/

November 1-3, 2005
The National Association of Stock Plan Professionals will hold its 13th Annual Conference in Chicago at the Hyatt Regency Chicago. This conference will deliver the practical guidance that companies (as well as lawyers and advisors and those responsible for implementation and administration) will need in the days ahead to respond to the recent landmark accounting requirements, fundamental shifts in tax law, and increased scrutiny of plan practices. The conference is preceded by two one-day seminars, "The Fundamentals of Stock Plan Administration," October 30-31, and "The 2nd Annual Executive Compensation Conference," October 31, both located at the Hyatt Regency. For more information, or to register, call (925) 685-9271 or visit NASPP 2005 Conference at http://www.naspp.com

November 14-15, 2005
Columbia Business School for Executive Education, with support from the New York Stock Exchange Foundation Inc., presents "Accounting Essentials for Corporate Directors: Enhancing Financial Integrity." It will be held in New York City at the Rihga Royal Hotel. This program is designed to strengthen the skills and capabilities of corporate directors in evaluating the appropriateness of financial reporting and accounting decisions and representations made by management. Speakers include FASB Chairman Robert Herz and PCAOB Chairman William McDonough. Visit http://www.gsb.columbia.edu/execed For more information, contact Liz Schultz at 1-800-692-3932

December 7-8, 2005
The Center for Business Practices (CBP), the research arm of management consultancy PM Solutions, will host an exchange of best practices for integrating strategy with portfolio, program, project, and performance management at their "2005 CBP Summit, Strategy & Projects" at Caesar's Palace, Las Vegas. Senior practitioners from companies like Prudential Financial, SAP, Campbell Soup, The New York Times Company, Mutual of Omaha, AAA, and others will reveal their best practices and lessons learned, covering critical issues in governance, structure, process, technology, people and culture. For more information, pricing, and registration, contact CBP at (877) 813-5193 or visit http://www.cbpsummit.com. Register by October 16 to receive the early-bird discount.

March 27-29, 2006
Outstanding Directors Institute, in partnership with Columbia Business School Executive Education, presents "Outstanding Directors Exchange ODX 2006: A Dialogue with Today's Most Respected Directors." It will be held at the Ritz Carlton Battery Park in New York City. Highlights include presentations by Charles Schwab, Tyco's Edward Breen, and Richard C. Breeden, corporate monitor for WorldCom. For more information, visit http://www.outstandingdirectors.com

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Bonus Article

Investor Scrutiny Is Here to Stay

Boardroom Briefing:  Board/Shareholder Communications

Our newest Directors & Boards Boardroom Briefing, on the subject of Board/Shareholder Communications is in the mail. This edition is being produced in concert with the National Investor Relations Institute.

To view a pdf of the Boardroom Briefing: Board/Shareholder Communications, click here.

To view all of our Boardroom Briefings in .pdf format, click here.

Next up, our Boardroom Briefing:  Executive Compensation, which will appear in December.

Women on Boards ... or, Where Are the Women on Boards?
Are women making progress in joining corporate boards? Not by the evidence of a study released in September by an organization of influential women leaders in the Philadelphia region. The Forum of Executive Women’s fifth annual highly respected report, “Women on Boards 2005,” indicates that despite the large pool of qualified female talent, most public companies here have stalled in their efforts to place women and women of color on local corporate boards. In fact, the report shows that while 61 board seats opened up last year, only four were filled by women, and two of those were filled by women of color. The study also reports that Philadelphia companies have made virtually no progress in the number of women in key leadership positions over the past few years. “It is incumbent upon the region’s business leaders to take action towards increasing the number of women on their boards immediately,” said Sharon A. Smith, President of the Forum of Executive Women and chief executive officer of the Girl Scouts of Southeastern Pennsylvania. A copy of the report is available here.


Pearl Meyer and Steven E. Hall Form Steven Hall & Partners
Pearl Meyer and Steven E. Hall have formed Steven Hall & Partners, a consulting firm focused solely on CEO, senior management and director compensation. Prior to forming the new firm, Meyer and Hall were chairman and president, respectively, of Pearl Meyer & Partners, an executive compensation consultancy they founded in 1989 and which became an operating group of Clark Consulting in 2000. “Effectively motivating corporate leaders is essential to our economy and to shareholders. We have brought together a group of consultants with the experience and independence to meet these challenges,” says Meyer, one of the country’s most recognized experts on CEO and director compensation. Her insights and survey data have appeared many times in Directors & Boards.


Author Notes
Directors & Boards columnist Gary Sutton has a book coming out in October titled Corporate Canaries: Avoid Business Disasters with a Coalminer’s Secrets. He weaves his business acumen from a career as a turnaround expert with tales of his Irish grandfather’s experiences working the Kentucky coal mines. Back then, canaries dropping dead were the early warning alarm of poisonous fumes; in like fashion, Sutton identifies the value-destroying if not life-ending threats that all businesses should be alert to. The book is being published by Nelson Business, a division of Thomas Nelson Publishers, http://www.thomasnelson.com. Look for an excerpt in the Fourth Quarter 2005 edition of Directors & Boards mailed to subscribers in mid-October.


Bob MacDonald, a longtime leader in the insurance industry, keynotes A.M. Best's E Fusion 2005 Conference, being held in Philadelphia Oct. 17-18, 2005 (http://www.efusion2005.com). The conference brings together insurers, technologists, and thought leaders to examine the latest developments in technology and risk. A.M. Best Co., established in 1899, is the world's oldest and most authoritative insurance rating and information source. MacDonald has authored several articles for Directors & Boards, and an excerpt from his new book, Cheat to Win: The Honest Way to Break All the Dishonest Rules in Business (see the D&B e-Briefing, July 2005) will appear in the D&B Fourth Quarter 2005 issue.


Willis Group Chairman and CEO Joe Plumeri, subject of the cover story interview for D&B’s Third Quarter 2005 edition (“Joe Plumeri Works the ‘Vision Thing’ at Willis”), was the guest speaker at this year's PricewaterhouseCoopers Briefing at the Reinsurance Rendezvous in Monte Carlo. He called on the industry to recognize the confluence of events impacting the industry as "our defining moment." While giving credit to the New York Attorney General for raising some serious issues, Plumeri indicated that moving the industry forward is more about taking collective responsibility for reforming and even revolutionizing the industry rather than satisfying the demands of regulators. A text of his talk is available here.