Book it: Best bets for board reading
By Directors and Boards

From a roundup of new books, insights on the power of recognition, importance of empathy, qualities of superbosses, key role that GCs play, activism . . . and a clash of boardroom titans.


The awesome power of recognition

From O Great One! by David Novak with Christa Bourg. Copyright ©2016 by the authors. Published by Portfolio/Penguin (

OGO — short for O Great One — is the name my grandkids have called me ever since they could talk. It may sound a bit over the top, but it came about because when my daughter was pregnant with her first child, I didn’t want to be called grandpa, poppy or any of the usual names. I wanted something a bit more fun and different. It was also easy for my grandkids to say, so it stuck.
Since then, OGO has become much, much more than just a nickname my family calls me. It has come to represent something I’ve practiced and encouraged throughout my entire life: the awesome power of recognition.
I’ve seen how impactful recognition can be. I’ve also witnessed how devastating it can be when it’s absent from the life of an individual, a team, and even a large organization. Often people think of recognition as the kind of fluffy feel-good stuff that businesses talk about to try to make their employees happy. But if used right, it does a whole lot more than that. Simply put: if you give people the recognition they’ve earned, if you show genuine appreciation and acknowledge the unique things people have to offer, then you will drive real results. And at the same time, you will lift spirits of everyone involved. It really does feel good to receive recognition, and it feels every bit as good to give it — often even better.
Considering that recognition can have such a hugely positive effect, it’s amazing to me that it’s still vastly underused in business, and also in life. I think that’s a crime. Making use of recognition is not hard, it’s not expensive, and you don’t need an MBA or even a position of authority to do it. I know this is true because I’ve seen it in action as my team and I built Yum! Brands into one of the world’s largest restaurant companies.

David Novak is the executive chairman of Yum! Brands Inc. He had been chairman and CEO for 14 years. Christa Bourg is a writer and editor who has worked on more than 100 books.

Clash of titans in the AIG boardroom

From Good for the Money by Bob Benmosche. Copyright ©2016 by the author. Published by St. Martin’s Press (

Among some people I respect, Harvey Golub (chairman of AIG) was also respected. “A brilliant man and very hands-on and very intrusive,” was how one close friend and colleague of mine at AIG described him. The friend added: “He felt that he had an obligation to look into things, not to micromanage them, but to look into them. I think from his point of view his definition of a chairman or a board member was very expansive, but it may be taking the role to an extreme.”
Of me, this friend added: “I just think if you give the ball to Bob, he will run with it and not have any excuses if he fumbles. (But) he’s got to know he has the ball. The problem is when you have two people who think they have the ball. It’s an accident waiting to happen . . . You had two very strong people in extraordinarily powerful positions who had different visions. And the question was, ‘Who was running the show?’ ”
That was the question. Intellectually, I knew some level of adversarial friction in a boardroom is not a bad thing. When dealing with big numbers and a lot of uncertainty, a rigorous challenging of assumptions can be helpful in establishing the best possible plan of action. I think the government, too, was not unhappy that we had some fiercely smart minds in that room, battling it out.
The problem, though, was that with the weight of responsibility, the boldness of the steps required, and the unrelenting pressures of the process, the board to my mind had become dysfunctional. Maybe — and it’s a long shot — if Golub and I were both less headstrong we could have forged some kind of authentic partnership. Ultimately, our visions were in such serious conflict that I concluded it was pointless to continue down this path. I needed to do something drastic. And so I did.

Bob Benmosche was president and CEO of AIG from 2009 to 2014. He joined AIG from MetLife, where he had been CEO. He died in 2015.

The dramatic moment when a pen is picked up

From Dear Chairman by Jeff Gramm. Copyright ©2015 by
Jefferson Gramm. Published by Harper Business (

Dear Chairman is about shareholder activism — the moment when a public company investor is no longer content with being just another bum in the stands. For most people, owning stock in a large corporation is a passive pursuit. They will quickly sell out of an investment if they disagree with how the company is being managed. But some investors decide to actively engage the company to try to enhance the value of their shares. This book focuses on the dramatic moment when a shareholder moves from a passive observer to active participant, and picks up a pen to plead his or her case.
I’ve chosen eight important interventions from history, featuring original shareholder letters. These letters, and the stories behind them, tell the history of shareholder activism through the last century — from Benjamin Graham’s battle with Northern Pipeline in the 1920s to Ross Perot’s showdown with General Motors in the 1980s to the well-publicized exploits of today’s fresh-faced hedge fund rabble-rousers.
Taken together, these cases explain how shareholder activism works, while giving historical context to today’s hostilities. By studying shareholder activism through history, we’ll see the tremendous influence investors now have over public companies, and what issues this raises for the future. We’ll also learn about how boards of directors work, what drives management teams to perform, and why corporate oversight can be so terrible.

Jeff Gramm runs a hedge fund and has served on several public company boards. He is an adjunct professor at Columbia Business School, where he teaches value investing.

Anne Mulcahy’s listening tour

From Illuminate by Nancy Duarte and Patti Sanchez. Copyright ©2016 by Duarte Press LLC. Published by Portfolio/Penguin (

Empathy is a fundamental requirement of healthy human relationships, and it’s learned very early on. When a toddler sees her mother laugh, she instinctively starts to giggle in unison so they share the fun together. When she hears her little brother cry, she may sob in solidarity. Empathizing brings people closer and makes them feel more connected. That connection makes people more willing to help and cooperate with one another.
The same principle holds true in our professional relationships. A 2007 study found that leaders who show empathy toward others are viewed as higher performers, and for good reason: People who care about others demonstrate higher motivation, productivity, and creativity. When employees feel that their leaders care about them, they feel more optimistic about the future and are more committed to the organization.
Executives who are new to an organization often embark on listening tours with employees and customers to get a firsthand account of problem areas and opportunities, let people vent, and help them move on. Before rolling out a new strategy when she took over as CEO of Xerox, Anne Mulcahy spent three months talking with employees. She said, “What I found out was that the more obvious problems were masking more fundamental problems.”
To dig deeper into employees’ concerns and settle their nerves, she held a dozen live television broadcasts, sent out over 40 letters, spoke at more than 80 town meetings hosted hundreds of roundtables and logged about 200,000 miles visiting sites in more than a dozen countries. Mulcahy later reflected, “The response was overwhelming. Defections slowed to a trickle. Hope rekindled. Energy returned.”

Nancy Duarte is CEO of Duarte Inc., the largest design firm in Silicon Valley. Patti Sanchez is SVP of strategic services for Duarte (

The central role of GCs

From The Inside Counsel Revolution by Ben W. Heineman Jr. Copyright ©2016 by the American Bar Association. Published by Ankerwycke (

At its core, corporate governance addresses two related subjects: the purposes of the corporation and the respective powers and roles of shareholders, the board of directors, and management in carrying out that corporate mission. This subject has spawned great controversy in the past 30 years: ownership v. control, principal v. agent, managerial capitalism v. investor capitalism, short term v. long term, shareholders v. directors, shareholders v. stakeholders, focus on stock v. focus on products, shareholders as activists v. shareholders as stewards, and directors as puppets of management v. directors as wise leaders of the company.
Because it involves interpretation and implementation of norms derived from both public policy and private ordering, the General Counsel’s role in corporate governance is central and her relationship with the board of directors fundamental. As governance issues have assumed greater importance, this sphere of activity is another dimension of the inside counsel revolution. The General Counsel, as a partner-guardian, helps define and carry out a “right-sized” role of the board in providing constructive and critical oversight of the CEO and other senior business leaders — and helps define a constructive company relationship, if possible, with that vast and diverse menagerie we call shareholders.
Ben W. Heineman Jr. was senior vice president-general counsel for General Electric Co. from 1987 to 2003 and then served as GE’s SVP for law and public affairs from 2003 until his retirement in 2005. His model for the modern inside law department is widely followed in major corporations.

Superbosses aren’t like most bosses

From Superbosses by Sydney Finkelstein. Copyright ©2016 by the author. Published by Portfolio/Penguin (

In 2005, I embarked on a full-blown research project, scouring business, sports, fashion, and the arts to find potential superbosses and map out their genealogical trees. In the end, I spent 10 years conducting more than 200 interviews; sifting through thousands of articles, books, monographs, and oral histories; and writing three dozen case studies in the most extensive and rigorous research project of its kind. I compiled, dissected, and analyzed stories about the lives and careers of 18 primary superbosses: Lorne Michaels, Ralph Lauren, Jay Chiat, Larry Ellison, Bill Walsh, Jorma Panula, Bob Noyce, Bill Sanders, Miles Davis, Michael Milken, Michael Miles, Alice Waters, Norman Brinker, Roger Corman, Julian Robertson, Gene Roberts, George Lucas, and Tommy Frist.
Looking for recurring themes and patterns, I discovered that superbosses differ considerably in their interpersonal styles; but the ways in which they identify, motivate, coach and leverage others are remarkably consistent, highly unconventional, and unmistakably powerful.
Superbosses aren’t like most bosses; they follow a playbook all their own. They are unusually intense and passionate — eating, sleeping, and breathing their business and inspiring others to do the same. They look fearlessly in unusual places for talent and interview candidates in colorful ways. They create impossibly high work standards that push protégés to their limits. They engage in an almost inexplicable form of mentoring and coaching, one that occurs spontaneously with (apparently) no clear rules. They lavish responsibility on inexperienced protégés, taking risks that seem foolish to outsiders. When the time is right, superbosses often encourage star talent to leave, after which these acolytes usually become part of the superboss’s strategic network in the industry.

Sydney Finkelstein is the Steven Roth Professor of Management at the Tuck School of Business at Dartmouth College and the director of Tuck’s Center for Leadership (

2016 Second Quarter

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