Last month there was a celebration of “Back to the Future” Day. The popular movie trilogy began with the original in 1985. The date of Oct. 15, 2015, figured prominently in the series as the date the two main characters time travelled to the future. Commentators had fun identifying what technologies predicted 30 years ago came to be: these included drones, computer tablets, hands-free video gaming, and smart clothing.
In the spirit of “Back to the Future” Day, I dipped into the Directors & Boards archives to see what we were predicting in 1985 for the future of corporate governance. Here are three:
• Boards would take self-evaluation more seriously. An article titled “The Board Looks At Itself” [Winter 1985] was one of the earliest in the governance literature to present a compelling case for board self-evaluation and to walk the reader through step-by-step how one company did it. The author was Alfred Van Sinderen, then chairman of Southern New England Telephone. It is the rare board today that does not do some form of self-evaluation.
• Boards would be made up mostly of independent directors. In the early to mid-1980s company officers still populated many of the seats on major corporate boards. Business legend Royal Little, the founder and former chairman of Textron Inc., foresaw the future composition of boards when he wrote this in his Summer 1985 article, “Who I Would Want On My Board”: “Boards should never have more than two management representatives — the chief executive officer and the chief operating officer. Other management directors are worthless. They do not dare speak when they disagree with the boss, and therefore they contribute nothing. When they do speak out in disagreement, the outside directors wonder whether the boss is really in control.” If anything, Little underestimated the radical overhaul of board composition to come, with the CEO typically becoming the only management representative on many boards.
• Directors will be forced to take a greater role in proxy contests. Think of Nelson Peltz's campaign for board representation at DuPont Co. earlier this year (or even any of the slew of recent activist assaults) when you read the following observation made by proxy experts Douglass Barnes and Roger Kapp in their article, “Strength and Strategy in a Proxy Contest” [Summer 1985]: “With dissident stockholders increasingly seeking to compel radical restructuring of their corporations or the pursuit of merger or disposition opportunities, what is at stake in a proxy contest if often not merely the composition of a corporation's board of directors but its future existence.”
These and other 1985 authors were certainly in sync with “Back To the Future” main characters Marty McFly and Doc Brown — in truth, the creators of the blockbuster movie series — in divining the future. I like to think our 2015 authors are doing the same today.
As always, I welcome your comments at jkristie@directorsandboards.com.