In this issue


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.

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.

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.).

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.”

Benefit Corporation Law and Governance: Pursuing Profit with Purpose

In his book, Benefit Corporation Law and Governance: Pursuing Profit with Purpose (Berrett-Koehler Publishers, 2018), Frederick H. Alexander has provided valuable insight into one of the most important developments in corporate law — the advent and development of the benefit corporation.

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