• 'Say on pay': What the market thinks
    Issue: 2008 Fourth Quarter
    By Ralph A. Walking
    Spencer Stuart / DirectorS & Boar DS Director S r oSter 18 directors & boards B oth presidential candidates support what has been termed “say on pay.” In general, say on pay gives shareholders an advisor y vote on CEO compensation. Heated arguments have been made on both sides of the issue, ...
  • On being a successful audit committee chair
    Issue: 2008 Fourth Quarter
    By Frederick D. Lipman
    Spencer Stuart / DirectorS & Boar DS Director S r oSter 20 directors & boards T he Sarbanes-Oxley Act of 2002 (SOX) transferred pow- ers from the management of a public company to its inde- pendent audit committee. The chair of the audit committee has the important role of providing leadersh...
  • Getting from a good to a great board
    Issue: 2008 Fourth Quarter
    By Janice Reals Ellig
    22 directors & boards I ’d love to put qualified women on our board,” as- serted the CEO of a major corporation. “We just can’t find them.” It’s a common complaint, and it’s conceivably a key reason behind the virtual stagnation in the number of women directors in corporate America — an average ...
  • HBS focus: The reality of corporate boards
    Issue: 2008 Fourth Quarter
    By Jay W. Lorsch
    26 directors & boards Governance Leadership A s Harvard Business School (HBS) marks its centennial this year, it is an appropriate moment to reflect on the role its faculty has taken in shaping the functioning of corporate boards. Most familiar to readers of Directors & Boards will be the wo...
  • A steady and steely eye on governance
    Issue: 2008 Fourth Quarter
    28 directors & boards Governance Leadership reasonable income and keeping the company out of the bankruptcy courts.” Further, Mace, in this conclusion, also recognized in 1970 a key issue directors face today (almost 40 years later): “The problem of the modern director is to define his role so t...
  • Choosing a new CEO: This board got it right
    Issue: 2008 Fourth Quarter
    By Robert C. Muschewske
    30 directors & boards SucceSSion Planning B oard members know that CEO selec- tion can seem like a crap shoot. It can be difficult to predict with confidence who will be successful in the position, given the vagaries of human nature, the daunting and unknown challenges that CEOs face, and the aw...
  • What should we pay board members for?
    Issue: 2008 Fourth Quarter
    By Jack Dolmat-Connell
    34 directors & boards Director compensation O ver the last decade, board ser- vice has changed dramatically, with much more time being spent on board and board committee mat- ters and significantly more real, or perceived, risk associated with board service. These factors altered the supply and ...
  • Dos and don'ts for managing a monitor
    Issue: 2008 Fourth Quarter
    By George A. Stamboulidis
    36 directors & boards RegulatoRy oveRsight T he duty of directors and manage- ment of any business is to protect the company and its shareholders’ interests. In today’s heightened regulatory en- forcement environment, an additional core responsibility of the board and good manage- ment is settin...
  • Get real with your real estate dealings
    Issue: 2008 Fourth Quarter
    By James L. McCormick III
    Fourth quarter 2008 39 LiabiLity and Litigation E nron and its progeny caused a dra- matic shift in the regulatory paradigm for American business. The excesses of off-balance-sheet financing, blatant conflicts of interest, and director ial inaction on which Enron helped focus global at- tention prom...
  • For your more robust personal protection
    Issue: 2008 Fourth Quarter
    By Priya Cherian Huskins
    42 directors & boards Director LiabiLity D irectors and officers of corpo- rations face the risk of personal li- ability for actions performed and decisions made on behalf of the corporation. Perhaps unknowingly, many directors and officers unnecessarily accept an enhanced risk of personal liabi...
  • What is a personal indemnification agreement?
    Issue: 2008 Fourth Quarter
    By Priya Cherian Huskins
    44 directors & boards Director LiabiLity policies change over time, sometimes for the worse. By contrast, personal indemnification agreements are not renegotiated annually, and corporations cannot amend these agreements to the detriment of directors or officers without their consent. Also consid...
  • 'That's not the real story'
    Issue: 2008 Fourth Quarter
    By Marilyn Carson Nelson
    Leadership 46 directors & boards ‘That’s not the real story’ From How We Lead Matters: Reflections on a Life of Leader- ship by Marilyn Carson Nelson with Deborah Cundy. Copyright 2008 by Marilyn Carson Nelson. Published by McGraw-Hill (www.mhprofessional.com). W omen MBA students are hungry to ...
  • He was the CEO, so everyone laughed
    Issue: 2008 Fourth Quarter
    By David Bertlett
    Leadership 46 directors & boards ‘That’s not the real story’ From How We Lead Matters: Reflections on a Life of Leader- ship by Marilyn Carson Nelson with Deborah Cundy. Copyright 2008 by Marilyn Carson Nelson. Published by McGraw-Hill (www.mhprofessional.com). W omen MBA students are hungry to ...
  • How EMC's CEO quashed the 'pocket veto'
    Issue: 2008 Fourth Quarter
    By Bryn Zeckhauser
    Leadership Fourth quarter 2008 47 new animal park in Florida. This park featured lots of live animals, and it quickly became the subject of a raging contro- versy that pitted the company against animal rights activists. “Today” was broadcasting live from the new animal park on opening day. It was st...
  • GE's secret weapon
    Issue: 2008 Fourth Quarter
    By Geoff Colvin
    Leadership 48 directors & boards a spoken commitment — “Yes, I’ll go along with it” — effec- tively quashed the pocket veto. Bryn Zeckhauser is a senior fellow at Harvard University’s Mossavar- Rahmani Center for Business and Government. Aaron Sandoski is managing director of Norwich Ventures, a...
  • A moment that changed a career
    Issue: 2008 Fourth Quarter
    By Stewart D. Friedman
    Leadership 48 directors & boards a spoken commitment — “Yes, I’ll go along with it” — effec- tively quashed the pocket veto. Bryn Zeckhauser is a senior fellow at Harvard University’s Mossavar- Rahmani Center for Business and Government. Aaron Sandoski is managing director of Norwich Ventures, a...
  • Joining the board of a PE-backed company
    Issue: 2008 Fourth Quarter
    By Todd Monti
    fourth Quarter 2008 49 Heidrick & StruggleS governance letter F or independent directors, s e r v i c e o n t h e b o a r d o f a company backed by a private equity (PE) firm offers expo- sure to unique professional, and potentially financially rewarding, opportunities. The attractions of such s...
  • Directors Roster
    Issue: 2008 Fourth Quarter
    52 directors & boards Directors & BoarDs’ Directors roster SponSored by Directors Roster A quarterly record of new director appointments american i nternational Group inc. New York, NY has added to its board: Nora JohnsonChair, Global Agenda Council on Systemic Financial Risk World Economic ...
  • Principles of Corporate Governance
    Issue: 2008 Fourth Quarter
    I n its 2004 .Principles of Corporate Governance , . the . international . Or- ganization . for .Economic . Cooper - ation . and .Development . (OECD) . describes . corporate . governance . as .“a . set . of .relationships . between .a .company’s . management, .its . board, .its . shareholders . and...