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In this issue
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A New TSR for Boards: An argument for focusing on talent, strategy and risk.
A new book by three governance experts argues that boards should focus on a new kind of TSR. Instead of “total shareholder return,” the authors propose “talent, strategy and risk” as a measure of performance that can help the corporation meet institutional investor pressure for a longer-term outlook balanced with short-term results.
The book, Talent, Strategy, Risk: How Investors and Boards are Redefining TSR, was released in July 2021 by Harvard Business Review Press. Its authors are Ram Charan, Dennis Carey and Bill McNabb.
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Serving the CEO: The board can and should take items off the CEO’s plate.
Irene Rosenfeld said in 2015 that, as CEO of the global snack maker Kraft/Mondelez, she spent a quarter of her time dealing with activist investors Nelson Peltz and William Ackman.
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Can Any Board Member Ever Be Truly Independent?
Both the NYSE and Nasdaq require the boards of listed companies to have a majority of independent directors and audit committees that are composed solely of independent board members.
But there is an argument about what makes a board member independent. Technically, independence means that the director has no “material relationship” to the business that could present a conflict of interest in performing their duty to represent all stakeholders. Those relationships include being an employee of the company or a partner of the company (distributor, supplier, etc.).
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Strengthening the “Pro” in Professional Director
Lord Boothby, a former Tory member of Parliament, described his experience as a corporate director to TIME magazine in 1962: “No effort of any kind is called for. You go to a meeting once a month, in a car supplied by the company. You look grave and sage. If you have five of them, it is total heaven, like having a permanent hot bath.”
Past issues you might be interested in
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2020 First Quarter
Directors & Boards Magazine—2020 First Quarter
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2020 Second Quarter
Directors & Boards Magazine—2020 Second Quarter
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2019 Fourth Quarter
Directors & Boards Magazine—2019 Fourth Quarter
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2019 Third Quarter
Directors & Boards Magazine—2019 Third Quarter