Directors & Boards articles from September 2001

Directors & Boards archives from September 2001

For a quarter of a century. (Letter From the Chairman).(Brief Article)
September 22, 2001... FROM ITS founding, DIRECTORS & BOARDS has called upon the best minds to stimulate thinking and to spark dialogue on corporate governance. For the past 25 years, prominent executives and their top advisers have offered our readers valuable...

Part I: A Life in Governance.
September 22, 2001... EMBARK WITH US NOW on a journey back through time. On the following pages is the story of the making of the modern-day corporate director. It is the tale of how we have arrived at the present stage of corporate governance, from the sleepy...

The Director Raymond Troubh: 'I can't imagine a situation that I haven't faced on some board.'. (A Life in Governance).
September 22, 2001... WHEN I FIRST WENT OUT on my own, I wasn't sure what I wanted to do -- whether I wanted to teach or to write or to remain an investment banker. The dilemma was solved when I wrote an article in the Harvard Business Review on tender offers and...

The Shareholder Activist Nell Minow: 'I arrived at the best moment for me to walk into ISS. It was fate.'. (A Life in Governance).
September 22, 2001... "My Getting Into corporate governance was, in a way, absolute dumb luck. Bob Monks and I were both working in the government, on a project for then-Vice President George Bush on regulatory reform. I didn't meet him at that time but that's when...

The Professor Jay Lorsch: 'When the book was published, I suddenly became an authority.'. (A Life in Governance).
September 22, 2001... "I TRACE MY INTEREST in corporate governance back to the early '80s when I was chairman of the Advanced Management Program. We were trying to develop an innovative curriculum, and we believed that if we were educating people who were going to...

The Fund Manager John Neff: 'I always did ask the hard questions.'. (A Life in Governance).
September 22, 2001... "AS A YOUNG SECURITIES ANALYST, I was limited in my knowledge of boards and how to analyze the quality of the directors. Boards were certainly more of an old boys-type club in those days. What I did find surprising was that you actually had...

The Arbitrageur Guy Wyser-Pratte: 'The name of the game is to work for the shareholders.'. (A Life in Governance).
September 22, 2001... WHEN I CAME OUT of the Marine Corps, the plan was for me to get my MBA at night while I worked for my father during the day. I learned the merger arbitrage business, and while I found it challenging and intriguing, I never felt that it was...

The Institutional Investor Richard Koppes: 'It took companies a while to figure out we were not going away.'. (A Life in Governance).
September 22, 2001... "I WILL NEVER FORGET my first day on the job at CalPERS. It was May 1, 1986, and the president of the board of CalPERS called me up. I thought he was calling to welcome me. Why he was calling was to tell me, "We want you to get after those...

The Chairman John Bogle: 'Shareholders everywhere probably pay somewhat of a price for collegiality.'. (A Life in Governance).
September 22, 2001... "CORPORATE GOVERNANCE actually was quite actively debated in 1951 when I began my career, although there were virtually no examples of mutual fund activism. In my Princeton thesis I did write about the role of mutual funds in corporate...

The Association Head John Nash: 'When I first started out, CEOs considered me their enemy.'. (A Life in Governance).
September 22, 2001... "AFTER WORKING FOR Goodbody & Co. (later acquired by Merrill Lynch) in New York from 1965 to 1970, I came back to Washington and started my own investment banking consulting and publishing firm. I published a lot of brochures for the individual...

The Recruiter Thomas Neff: 'We recognized a growing need for our services to recruit directors.'. (A Life in Governance).
September 22, 2001... "WHEN I GOT INTO executive search, I wouldn't say that it was in its infant stage but it was certainly in the early stages of development. Booz-Allen was one of the original firms in the business and had spawned the founders of several other...

The Judge William Allen: 'I didn't try to frighten directors. I encouraged them.'. (A Life in Governance).(Brief Article)
September 22, 2001... "I WAS ALWAYS INTERESTED in business and in economics. When I first went to law school I had the idea that antitrust was something that I would pursue. Back in the late '60s and '70s antitrust was an area in which government policy and law...

The Director Barbara Franklin: 'It seems like there was a sharp uptick all of a sudden.'. (A Life in Governance).
September 22, 2001... "I WAS VICE CHAIR of the Consumer Product Safety Commission at the time when Harold Williams was chairing the Securities and Exchange Commission. I remember having lunch with him one day, and he was telling me about his interest in independent...

Part II: The Way It Was.(Brief Article)
September 22, 2001... THE HISTORY OF THE CORPORATE BOARD continues in the following section. Here is a year-by-year walk through the past 25 years. We revisit some of the notable articles that we have published in each of those years to see what was on the minds of...

The Way it was: 1976.
September 22, 2001... Founding Words We believe in private enterprise and the profit system and the institution of the Corporation, but only up to a point. Our fondness for the system begins with the profit motive which converts labor and materials into goods...

The Way it was: 1977.
September 22, 2001... Early Call for Board Audit The spotlight is on the board and will remain so with increasing intensity. It took some massive jolts like Penn Central, BarChris, Ampex, Lockheed, Equity Funding, and Gulf Oil to bring directors into the real...

The Way it was: 1978.
September 22, 2001... Duty of Care General Statement: In addition to owing a duty of loyalty to the corporation, the corporate director also assumes a duty to act carefully in fulfilling the important tasks of monitoring and directing the activities of...

The Way it was: 1979.
September 22, 2001... Advise? Or Decide? There is a time to advise, and a time to decide. I propose here that neither the personal qualifications of directors, nor the organizational status of the board per se, nor the nature of particular issues should...

The Way it was: 1980.
September 22, 2001... A Good Deal Well, we never had the "urge to merge" here at DIRECTORS & BOARDS, but it happened. DIRECTORS & BOARDS and its sister publication, Mergers & Acquisitions, have been acquired by The Hay Group, a management consulting firm. They...

The Way it was: 1981.
September 22, 2001... Overstaying One's Self as a CEO One of the most dangerous things that can happen to a corporation is to drift into becoming a one-man company, to start dealing with the world primarily through the perceptions of one person. Over the years,...

The Way it was: 1982.
September 22, 2001... The New Reality Some management theorists identify the communications role of independent directors -- communicating inside-out and outside-in -- as the most underdeveloped in American industry. They say, in effect, that all too many...

The Way it was: 1983.
September 22, 2001... In Adversity, Be Encouraged America encourages optimism. This is the first great nation in the world where the rules were written by victims and not by victors. If you go back through history, through the Greeks, the Romans, the Empire of...

The Way it was: 1984.
September 22, 2001... The 'Socratic' Director How do you represent the shareholders at the meetings of the board? Personally, I try to follow a variation of the Socratic method. I mainly ask questions. Of course, I try to avoid second-guessing the management. A...

The Way it was: 1985.
September 22, 2001... Early Call for Formal Self-Evaluation Every board needs a way of assessing performance. Otherwise, it carries out its functions year after year without any real measure of effectiveness. The danger of foregoing such an exercise is that a...

The Way it was: 1986.
September 22, 2001... On Our 10th Anniversary When we acquired DIRECTORS & BOARDS [in 1981], it was becoming evident that directorship was in transition. The prestige was being wrung out of the job, and greater risk was being heaped on. There were going to be...

The Way it was: 1987.
September 22, 2001... The Drive for Equity We have made remarkable progress in executive compensation during the 1980s. We have weathered a severe recession, historic inflation, and the battering of major U.S. industries -- first textiles and smokestack...

The Way it was: 1988.
September 22, 2001... Rule No. 1 in the Takeover Game I was in western Canada on a long-deferred fishing trip with my 12-year-old son in August 1985, and was returning home the day Hanson tendered for SCM. When I got back to New York my wife had two things to...

The Way it was: 1989.
September 22, 2001... Boards Achieve Higher Visibility As a major provider of D&O insurance to corporations, the development that we, at National Union Fire Insurance Co., see as interesting as anything in the restructuring area is the visibility that boards...

The Way it was: 1990.
September 22, 2001... 'We Had No Idea...' Leaders of American corporations entered the 1980s with a great sense of confidence. Deregulation was the watch word of the day -- a free market environment, with less rigorous antitrust enforcement. We simply did not...

The Way it was: 1991.
September 22, 2001... On Our 15th Anniversary DIRECTORS & BOARDS admittedly is not of an age to rival some of the great corporate names that you'll find in the pages of this issue, but we take some comfort in the fact that 22 of the top 100 companies listed by...

The Way it was: 1992.
September 22, 2001... Ready To Be Surprised What is happening, right now, in global business is both worrisome and exhilarating. Today, one new management axiom is that the most powerful threats and opportunities for a company do not come from within normal...

The Way it was: 1993.
September 22, 2001... Standards Are Rising In a rapidly evolving international economy, those institutions that are not changing their ways of doing things and, most important, their thinking, are clearly headed for extinction. The Roman orator Cicero once said...

The Way it was: 1994.
September 22, 2001... The GM Board Guidelines Issued As I see it, the board's role is to act as an independent auditor of management -- asking the tough questions that management might not ask itself when the company is doing well and is a recognized...

The Way it was: 1995.
September 22, 2001... This CEO Wants Strong Directors For me, and for most CEOs, the irresponsible image really rankles. Most of us made it to the chief executive position because of a particularly high degree of responsibility and commitment to our jobs...

The Way it was: 1996.
September 22, 2001... On Our 20th Anniversary: A Salute With this issue, DIRECTORS & BOARDS celebrates our 20th anniversary. The publication was founded during the era of the foreign corrupt practices hearings to serve as an adviser to boards of directors. Our...

The Way it was: 1997.
September 22, 2001... The Three Stages of Activism The evolution of institutional activism falls into three distinct stages. During the early years (1987-1990) activists were intensely focused on takeovers and control. Proposals were designed to eliminate...

The Way it was: 1998.
September 22, 2001... Eye on the Next Revolution Early in World War I, Henry Ford sailed a ship to Europe with a group of influential religious, academic, and business leaders. His intention was to appeal to heads of state across central and western Europe to...

The Way it was: 1999.
September 22, 2001... Pills Popped at Prodigious Pace In the 1999 proxy season, companies continued to adopt or renew poison pills at a torrid pace. Through the first five months of 1999, more than 200 companies either adopted new pills or renewed existing...

The Way it was: 2000.
September 22, 2001... Vulnerability to Fraud Imagine that you are the CEO of what was the then-56th largest company in America with a $38 billion market capitalization. You just finished a very positive conference call with several hundred investors during...

Part III: The Shape of Things to Come.(Brief Article)
September 22, 2001... NOW THAT WE KNOW how we got to where we are, What lies ahead? That's the dimension we endeavor to add in this final chapter of the oral history. Predicting the future is hazardous duty, but we reached out to a team of well-positioned...

Know thine enemy: Anti-globalization forces. (The Shape of Things to Come).(Brief Article)
September 22, 2001... ONE OF THE MORE significant challenges to the boards of large public companies over the coming years will be dealing with the growing resistance to globalization. Although ill-defined, globalization encompasses a broad spectrum of concerns that...

Ever more reliance on good judgment. (The Shape of Things to Come).(Brief Article)
September 22, 2001... TO EFFECTIVELY GOVERN the enterprise communities of global capitalism, directors must focus on their essential responsibility: exercising commonsense judgment. The function of a corporate board, like any other council or legislative body,...

Meeting the challenge of sustainability. (The Shape of Things to Come).(Brief Article)
September 22, 2001... THE FUTURE of corporate governance promises to be exciting. At the boardroom level, the challenges for directors are growing. Not only are corporations more complex, but the pace of technological and economic change is quickening, forcing...

Some scenarios for change...and a wild card. (The Shape of Things to Come).(Brief Article)
September 22, 2001... THE CORPORATE GOVERNANCE landscape has clearly changed for the better in the last quarter century. Led by institutional investors and (to a not inconsiderable extent) corporate gadflies, corporate boards have become more aware of and responsive...

A much more thorough understanding of strategy. (The Shape of Things to Come).(Brief Article)
September 22, 2001... TODAY THE PRESSURE for companies to perform well relative to their peers is forcing directors to focus more and more on the strategy of the enterprise. It's already occurring to more directors that the tendency to rubber-stamp the CEO's game...

More fairness and equality for investors worldwide. (The Shape of Things to Come).(Brief Article)
September 22, 2001... GLOBALIZATION HAS PROFOUNDLY changed the way companies operate and meet the needs of their customers. In the next decade, it will increasingly alter how companies relate to their shareholders. Just as companies are expected to offer a...

The information revolution: How will the board respond? (The Shape of Things to Come).(Brief Article)
September 22, 2001... THE INFORMATION REVOLUTION and its impact on the worldwide economy will be the strongest influence on future boards. Beginning in the 1990-1991 recession, technological advances and restructurings helped produce layoffs. Productivity gains at...

How a corporate board can be strengthened. (The Shape of Things to Come).(Brief Article)
September 22, 2001... THE UNITED STATES is fortunate that a well developed code of commercial law, strong and vigilant regulatory agencies, a business-oriented culture and powerful peer pressures have combined to foster corporate managements which are, on the whole,...

'Resource linkages' will be the key. (The Shape of Things to Come).(Brief Article)
September 22, 2001... AGENCY THEORY is the most influential development relevant to the history of the board of directors. Adam Smith, in An Inquiry into the Nature and Causes of the Wealth of Nations (1776), captured its essence with his observation that managers...

Different cast of characters, different set of solutions. (The Shape of Things to Come).(Brief Article)
September 22, 2001... THE CORPORATE GOVERNANCE WAR is over: the good guys won! Any discussion on the shape of things to come in corporate governance must begin with the remarkable transformation that has occurred in the last 20 years in corporate governance in...

From days of thunder, the movement marches on. (The Shape of Things to Come).(Brief Article)
September 22, 2001... WHEN A GROUP of public pension fund managers from around the country met in Washington in February 1985 to create the Council of Institutional Investors, the shareholder rights movement was still in its infancy. To be sure, gadflies (some...

A more nuanced view of the director's role. (The Shape of Things to Come).(corporate directors)(Brief Article)
September 22, 2001... FOR THE LAST SEVERAL DECADES, "shareholder primacy" has dominated in judicial opinions and academic writings as the key value to guide board decisionmaking. In practice, this has been translated into a singular focus on "shareholder value,"...

'Compensation literacy' and other fires to be lit under boards. (The Shape of Things to Come).(corporate boards)(Brief Article)
September 22, 2001... INSTITUTIONAL INVESTORS will be increasingly more powerful and demanding with regard to their expectations from corporations, their boards and management. Activist groups will continue to agitate for "change and reform" of corporations. The...

The changing face of the internal auditor. (The Shape of Things to Come).(Brief Article)
September 22, 2001... IN JUNE 1999, THE BOARD OF DIRECTORS of the Institute of Internal Auditors approved a new definition of internal auditing and set in motion a series of events to change the way we look at internal auditors. This definition has changed internal...

The promise of common ground. (The Shape of Things to Come).(corporate governance)(Brief Article)
September 22, 2001... IN THE 1990s INVESTORS learned there was a middle ground between the hostile takeover and the Wall Street Walk -- and that middle ground became the corporate governance movement. But the corporate governance movement has often left unanswered...

Governance as a management system. (The Shape of Things to Come).(Brief Article)
September 22, 2001... CORPORATE GOVERNANCE in the U.S. and increasingly throughout the world has begun to transcend its original focus. Initially, governance focused on proxy voting issues, as investors believed these to be surrogate measures to keep management...

Going small, and going international. (The Shape of Things to Come).(corporate governance)(Brief Article)
September 22, 2001... SOME LIKE TO DEBATE whether good corporate governance indeed matters and whether a correlation exists with the bottom line. I believe that most large U.S. public companies agree with the Business Roundtable's Statement on Corporate Governance,...

HR board committees: A fad, or the future? (The Shape of Things to Come).(human resources)(Brief Article)(Column)
September 22, 2001... WHENEVER I DISCUSS a human resources committee with a CEO, the words "human resource" seem to cause the CEO to think of the soft side or benefits of HR. I have to immediately call time out and restate that this committee reflects the single...

Continued commitment to ownership-based governance. (The Shape of Things to Come).(Brief Article)
September 22, 2001... THE CHIEF executive officers of large public corporations will conclude some time within the next 10 years that meaningful accountability to their own shareholders is desirable. Corporate governance has assumed its present cast due to the...

A robust market for director education. (The Shape of Things to Come).(Brief Article)
September 22, 2001... DIRECTORS HAVE BEEN going back to school for almost a decade now to study introductory and advanced topics in corporate governance at Harvard, Wharton, Stanford, Northwestern, and Kennesaw State. In addition, thousands of directors have...

The pendulum swings in the boardroom: It appears that as CEOs have been getting younger, their boards -- the men and women who select, advise and, yes, fire the CEOs -- are starting to get older. (Spencer Stuart Governance Letter).(Column)
September 22, 2001... WHEN INTERNET fever was at its peak just over a year ago (can it really have been that recently?), there was frequent ruminating about the future of corporate veterans in these rapidly moving, highly successful companies. Technologically and...

Directors Roster: In affiliation with Spencer Stuart -- a quarterly record of new director appointments. (Spencer Stuart / Directors & Boards Directors Roster).(Statistical Data Included)
September 22, 2001... IN THE SPIRIT of the oral history presentations found throughout this special Silver Anniversary edition of DIRECTORS & BOARDS, we asked five newly appointed directors who joined boards during the July-September 2001 quarter to dig into their...

The Directors Roster.(Directory)
September 22, 2001... The Directors Roster is a detailed record of executives added to corporate boards. The Roster covers a three-month period prior to the publication of each edition of DIRECTORS & BOARDS. It includes companies of all sizes, from billion dollar...

The Editor: James Kristie; Even to a journalist's eye, the board was in the deep background.'. (A Life in Governance).
September 22, 2001... WHEN I CAME to DIRECTORS & BOARDS in 1981, I had never written a single word about a board of directors. I had spent my first five years as a journalist writing for and editing several different types of business publications -- employee...