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Jim
Kristie's Reader Opinion Roundup
On Presenting New Ideas at a Board Meeting I asked, you answered: What to Do in Cathie Black’s situation? Edited by James Kristie What follows is a roundup of comments received in response to last month’s e-Briefing critique of the Cathie Black board tale. Comments have been edited for style and length. Do Both As I read your article commenting on what Cathie Black had said, it seemed to me that we should be able to do both. Sometimes, you have an idea, and it is between meetings, so you ask another board member what he or she thinks. Or perhaps you raise it with the chair or CEO. At the same time, there should absolutely be equal opportunity for spontaneous ideas at board meetings, as the dialogue should be such that it generates dialogue, not discourages it. — Alison Winter, Board Member, Nordstrom Inc., and Co-Chair, Women Corporate Directors Good Reasons to Lay the Groundwork I have used both approaches — raised new ideas at board meetings, and also built consensus one-on-one with fellow board members. Both approaches are effective, depending on the circumstances. Through a one-on-one conversation with a fellow director prior to a board meeting, the initiator has the opportunity to further develop the idea, so that when the idea is raised with another director or with the full board, it can be presented in the most effective, most developed manner. The answer also depends on the number of directors on the board. The larger the board, usually the most effective approach is to lay the groundwork first in one-on-one conversations with the directors who are the board’s opinion leaders. — Stanley Silverman, Board Member, A. Schulman Inc. and C&D Technologies Inc., and former President and CEO of PQ Corp. Ponderous Processes Guaranteed Jim, this is a great way to ensure bureaucratic, ponderous strategic processes. Been used at our previously largest auto company for years. — M. Daniel Butler, CBI, Managing Member, Aetherian Group LLC Free Flow of Information Gets Their Vote Jim, reading that anecdote sent a shiver down my spine. That is exactly the atmosphere we hope is not present in the boardroom. Members should be able to present ideas and have them heard by other members with fair deliberation. I understand the desire for members to want to have a chance to think about something before they vote, for instance, but the discussion on and at least presentation of an idea should be a basic freedom enjoyed in the boardroom. The idea of rooting out support in one-off meetings outside the boardroom seems both cliquish and almost manipulative. There is nothing wrong with bouncing an idea around with fellow members if it needs to be better crafted before presenting it, but using it purposely as a strategy so that you have support off the bat seems to change the neutral context for the other members who will hear it for the first time. If the idea doesn’t stand on its own, maybe it wasn’t that good. Each member deserves to hear deliberations of the others, and I think presentation to the board as a whole for an idea seems both reasonable and fair. I work for the Florida State Board of Administration, which is one of the largest pension funds in the U.S. We cast our votes for directors and chairmen at public companies based in part on how well the board allows free flow of information, to the extent we are able to judge it from publicly available information. This is an extremely important aspect of governance for us, and we firmly believe that a culture where individuals are not encouraged to share their thoughts presents a danger to their most important role of providing stewardship and monitoring on behalf of shareowners. I am surprised and, more than that, disappointed that not only was this advice given to a new member, it is now being perpetuated by the author. I am a member of two nonprofit boards and thankfully this is not at all how we conduct business. This should’ve been an anecdote about changing the culture of the board, not about the member conforming to it. If I’m not mistaken, this is a description of how politics work, which I don’t think is a good model for our directors. — Tracy Stewart, Corporate Governance Manager, Florida State Board of Administration Look What Happened to My Idea Jim, your May commentary struck home. Several years ago, I served on the board of a company that assembles/sells sterilized surgical procedure trays. The trays are used in hospitals and save the O-R nursing staff a lot of time because all the instruments necessary for any given surgical procedure are all right there ready to go. During one of our board meetings, I asked — in the same unplanned and unexpected manner as Ms. Black — whether there were any plans to expand the product lines and market to include dentists' offices/dental procedures. THUD. Lots of very dismissive mumbling of "no, no, no" and we quickly moved on in the agenda. About a year later, the management team proudly announced that the company had hired a new sales person who was to call exclusively on DENTISTS. Gee, what a bright idea.... I'm afraid not much has changed since my experience with that board. — Nina Novak, Managing Editor, Beard Books LLC Board Members Are Shielded You are, of course, entirely correct in your assessment of the negative and entirely inappropriate aspects of board cultures such as the one Ms. Black ran into. How prevalent is this? If asked, I would bet most board members would say this is not their practice. However, having experienced the degree to which senior company management shields board members from exposure to new ideas for their company coming from uninvited outsiders, I would not be surprised to learn that the free flow of new ideas during board discussions isn't as regular an occurrence as the shareholders would expect. — Michael W. Choniski, Corporate Value Services LLC Strong Boards Are Comfortable with Spontaneity Cathie Black stated that she believes that anytime you are asked to serve on a board it is a sign of "respect for your skills and ideas." I don't know where she got that idea but that may be the beginning of her errors in thinking here. Many folks are asked to serve on a board because it is a known fact that they are the type to maintain the status quo — they won't rock the boat, so to speak. The strongest boards welcome dissent and appreciate the dialogue that is invoked by opposing views. A strong board is very comfortable with the spontaneity that might be expressed by a new idea at a board meeting as long as the ideas are legitimate and the efficacies of time factors are honored. — Jack Roddy, J.P. Roddy Consultants An Abysmal Reflection I entirely agree with you that Black’s prescription for board effectiveness is disagreeable. It may work, but only in the way that bribing a customs officer in a South American country works to allow you to import goods inappropriately. Both strategies get the desired results but develop a subversive culture. The boardroom in this age must be refreshed with honesty, collegiality, competence, and candor. The idea that directors must be politicking to get their ideas heard is an abysmal reflection of an era of boardroom practices that must be put behind us! — Jim Brown, Consulting Partner, STRIVE! Applies Only to a Minority of Boards Jim, you asked if you are off base. My answer is “yes and no.” Some organizations have a culture precisely consistent with the story: At the company I am thinking of, it’s a practice that exists at all levels, not just the board. But this applies to a minority of companies in my experience, especially in the U.S. — Norman D. Marks, Vice President, Governance, Risk, and Compliance, SAP BusinessObjects Division; IIA blog: http://www.theiia.org/blogs/marks/ Danger of Endless Discussions Off Point Thanks for the article! All new board members should go through an orientation process in preparation to serve on a board. Most people don't know how to be effective board members. The real work of the board occurs at the committee level. This is where new ideas and thoughts, agendas, and debates about issues are really vetted. New ideas off agenda or off topic create organizational gridlock and endless discussions off point. The board meetings have built-in discussion on topics for the board to weigh in on and debate. It's not that boards are not receptive to new ideas, it’s that they need to be vetted in the proper forums prior to being introduced to the general board. New board members lacking history about previous agendas and discussions get boards off point and off topic. Additionally, at the committee level, members who want to introduce new ideas should take responsibility for championing those ideas as well as participate in the execution. Lots of great ideas and too few people to execute them! — Curtis C. Brown Jr., Managing Partner, Entertainment and Sports Plus Cathie Black Is Correct, Unfortunately I believe the author is right to advise to "pre-book" support for new ideas prior to them being presented. This is not what ought to be, but in my experience on boards and as an executive, it is the smoothest way to get new ideas approved. When joining my first board, the resistance to new ideas was tangible. I could feel some members’ concerns that I want to "change things" and "things are comfortable now." I learned from that experience and am now on my second board (by choice) where others see the merits of my ideas. Similarly, my experience in the executive ranks is that most larger organizations are full of political systems that result in inertia and it is very difficult to drive the business forward without this "pre-booking" of support (or without support from a strong senior executive). — Board Member (requesting anonymity) Watch Out for the Naysayers I think Cathie Black is being overly dramatic although there is some truth in what she says. I've found — in service on 22 nonprofit boards — a better technique is to sketch in the idea, offering to develop it if there is interest. If an idea is any good, the issue becomes one of absorption. Careful trustees or directors need time to think it through and are reluctant to offer a judgment until they've done that. If they're stunned into silence, it is probably an exciting idea. Sometimes you don't want to give it too much early scrutiny because the naysayers, which every board has, will figure out how they can oppose it and gain credit for sagacity. You've got to negotiate around these impediments. — John Budd, Chairman, The Omega Group Rationale to Vet Beforehand My response: it depends. If it is an idea that could be discussed individually with several board members in advance, it is a good idea to do so. Why? Well, was the idea really new? Had it been discussed earlier? What would make it an even better idea? Conversely, if the idea is triggered at the meeting in reference to a matter being discussed, bring it up. Do so without blazing trumpets, but rather with a "has anyone ever thought of..." approach. — Bruce Ellig, Advisor to Corporate Boards Red Flags Can Be Missed Jim, I don't think you are off base at all to think that it’s wrong to not be able to be creative and thoughtful during a board meeting rather than to have everything "canned." Yes, I agree — that's why problems and red flags are missed. Who would want to raise one in that kind of environment? It's a shame that there are so many boards that function in such a bureaucratic fashion, and that Cathie succumbed to those ways. There are many times when you have discussions pre-board to gauge other members’ perspectives, but that should not preclude new ideas during a meeting. — Deborah K. Pawlowski, Kei Advisors LLC It’s the Shareholders Who Suffer Although I suspect I will be in the minority, I could not agree more with your assessment of the situation as described in Cathleen Black’s book. The approach advocated, in my mind, is symptomatic of the lameness and dysfunction of far too many boards. There is a “political” nature to this whole issue of pre-vetting which is something, in general, for which I have no tolerance. It is certainly not conducive to the hardnosed approach that is needed for a board to ensure the maximization of long-term value. In short, this basically speaks to a “don’t rock the boat” philosophy which I believe permeates (far too often) both management and boards. One of the biggest problems with boards is that on far too many, no one will speak out or at least not with the directness and intensity that may be needed. Clubbiness, a false sense of “getting along,” and a perpetuation of an “old boys network” among long-serving directors get in the way of the intended agency role of the board. It is then not the one with the new idea that suffers but the shareholders. Having said the above, I should offer one caveat: My entire career has been built around being a catalyst, irritant, and/or activist — as a board member, chairman, advisor, and/or investor to move companies and organizations to their full potential. As such, my natural tendency is always to speak my mind and to do so whenever and wherever the situation arises. — Henry D. Wolfe, Chairman, De La Vega Occidental & Oriental Holdings LLC A Role for Upfront Lobbying Jim, I have been on many boards and have found that it can work both ways. But if I really have something in mind prior to a meeting and think it’s something I want to see pursued sooner than later, it is very helpful to do some upfront lobbying. If I have a new idea that comes up during a meeting I feel free to bring it up for discussion. However, I would not expect any such new idea that I thought had merit to be voted on at that same meeting. Instead, I would request that it be placed on the agenda for the next meeting so that people would have time to mull it over prior to making a decision. I would never want to squelch a new idea or stifle the creative juices of the board, but it does help to “vet” any ideas out. — Bob Lovely, Board Member Unless ‘Rome Is Burning…’ I suggest a middle ground. Nonprofit board directors, few of whom are acculturated to their role (rarely a problem in the public company arena), are notorious for making “I move” launches out of the blue; the chair and other directors often get swept up in the moment, or don’t want to be seen as obstructionist, or worse. I urge that the board operate from a well-organized consensus agenda focused on the critical strategic planning/strategic management and policy issues to be addressed (which should consume the meeting). Unless it reflects an emergency, an unplanned (but welcomed) initiative proposed is to be acknowledged, then assigned for study. That is part of the board culture. Top directors should contribute, should constructively challenge. Bright ideas are wonderful, but unless “Rome is burning,” such should line up in the gestation/vetting process like all others. — Gerard Hurley, President, Association Executives Resources Group Orient This New Director First off, I wondered if Cathie Black had any orientation. The time and place to familiarize new board members with how to bring new ideas before the board is at an orientation of the governing board's policies, procedures, and structure. I'm all for new ideas. I do agree that if a board is more concerned with "etiquette" than moving forward it can become stogy and miss the opportunity for growth. But, by the same token, board meetings that turn into freewheeling forums often produce nonproductive discussion. — Beverly D. Rehfeld, Board Advisor ‘Don’t Make a Scene’ Reading Ms. Black's story, I sensed an undertone in her advisor's words that said, "Run it by us before the meeting so we can shoot it down quietly if we don't like it" and "Don't make a scene in meetings raising embarrassing questions or offering ideas we should have thought of already." If there were greater legal "incentive" and accountability on board members, there would be a greater counterweight to the etiquette that undermines the responsibilities of all board members. — Ray Barto All Too Typical The advice given Cathie was correct — and that is a damning statement about the all too typical state of board governance. Boards of nonprofit, corporate, and governmental bodies are the least developed element in enterprise. Every function under boards makes more sense than boards do. Conceptual coherence just hasn’t been boards’ long suit, leading to boards being best described as incompetent groups of competent persons. — John Carver, Board Advisor, developer of the Policy Governance Model, and author of six books on governance Seeding Has a Potential for Backfiring Unfortunately, just like families, there are the spoken and unspoken rules. It is the unspoken rules that lead to disaster sooner or later. I am the director of a small nonprofit. At our board meetings I encourage and expect new and innovative ideas. I encourage all of our board members to come to the table with possible solutions and new service ideas. I believe if a board member feels they have to gather support about an idea beforehand that it could cause a possible division in the board. Unfortunately, I have seen this happen and it takes years to correct. It can also backfire on you if you talk to the wrong person. I have also seen this happen. A wonderful idea presented too early can kill it all together. However talking to friends about ideas in between board meetings in not a negative and will happen among friends. But intentionally searching out or seeding a board meeting in advance is very bad ethics. Thank you for your articles. They give food for thought and thought-provoking moments at our board meetings. — Jennifer Sathre, Rivers Edge Support Center |
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