Directors & Boards articles from September 2005

Directors & Boards archives from September 2005

Unprecedented corporate charity.(LETTER FROM THE CHAIRMAN)
September 22, 2005... AT OUR Sept. 1 board meeting, the first item on the agenda was how the company could help the victims of Hurricane Katrina. Though we have only limited operations in the stricken region, the chairman wanted "to get out in front in lending a...

Big question kicks off the 'Big 3-0'.(EDITOR'S NOTE)
September 22, 2005... THIS ISSUE kicks off the 30th year of publication of DIRECTORS & BOARDS. Could there be a more appropriate cover story to launch our milestone year than one titled, "Rethinking the Board"? In his leadoff article, author Jerry Wind observes,...

The wonderful world of Disney (again!): Eisner, Ovitz ... and Chandler. Lessons from a 'wild ride.'.(QUIDDITIES)
September 22, 2005... I WRITE AGAIN about the Walt Disney Co. for a simple reason: That organization is, for a governance commentator, not just lush soil, but the Fertile Crescent, the Nile River valley, and the Indus River valley, combined. In a relatively...

Too much debt: bye-bye birdie; When the canaries start dropping, it's only a matter of time before debt knocks you off.(SUTTON'S LAWS)(Corporate Canaries: Avoiding Business Disasters with a Coalminer's Secrets)(Book Review)
September 22, 2005... Ed. Note: Columnist Gary Sutton's latest book, Corporate Canaries: Avoiding Business Disasters with a Coalminer's Secrets, is being published in October 2005 by Nelson Business (www.thomasnelson.com). The following is an excerpt. A CENTURY...

Ways to improve your D & O insurance coverage: you can negotiate enhancements to your policy. One place to start is with the definition of 'claim.'.(D & O INSURANCE UPDATE)
September 22, 2005... ALL OFF-THE-SHELF D & O insurance policies contain a very large number of coverage shortcomings. Many of these shortcomings individually could result in millions of dollars of lost coverage. Fortunately, D & O policies are negotiable. ...

Is it time for a majority voting standard? Public companies may soon have difficulty resisting the call of investors to end plurality voting for directors.(LEGAL BRIEF)
September 22, 2005... RECENT corporate scandals have renewed demands that directors be more directly responsive to stockholders. Under the banner of "accountability," institutional stockholders and others have presented companies with an increasing number of...

Running with Reebok: back in 1991, Reebok's CEO laid out the four essentials of global leadership.(FROM THE ARCHIVES)
September 22, 2005... Ed. Note: One of the big M & A deals of the summer of 2005 was the $3.8 billion offer by Adidas to acquire Reebok International. Paul Fireman bought the U.S. distribution rights to this British brand of running shoe in 1979 for $65,000. (His...

A Time for Heroes.(DIRECTOR LIBRARY)(Book Review)
September 22, 2005... A Time for Heroes By Robert L. Dilenschneider Published by Phoenix Press, Beverly Hills, Calif., 244 pages, $24.95 ROBERT DILENSCHNEIDER wants us to think about what it means to be a hero. In his latest book, A Time for Heroes, he...

Rethinking the board: what's called for are breakthroughs in conceptualizing how boards work--rather than simply demanding more of our current boards.(ORGANIZATIONAL LEADERSHIP)(Cover Story)
September 22, 2005... A Business Week cover story earlier this year entitled "Downsizing the CEO" discussed how the chief executive's strategic role is being reduced by a bevy of auditors, lawyers, and Sarbanes-Oxleycharged directors. In many cases, the circling of...

'If you could make one change to the governance system ...' In the spirit of Jerry Wind's "Rethinking the Board" article, Directors & Boards posed the above query to selected board members and governance experts. Their replies follow.(ORGANIZATIONAL LEADERSHIP)(Company Profile)
September 22, 2005... Strengthen the focus on strategy The extreme expansion of oversight and control responsibilities imposed onto the boards of public companies has, unfortunately, made it more difficult for directors to dedicate focused time on shareholders'...

The chairman's job description: time for a change in your governance leadership? In the post-SOX era, there is a new interest in separating the top jobs. Here is what's required of the nonexecutive chair.(DUTIES OF DIRECTORS)
September 22, 2005... IN THE UNITED STATES it has long been accepted practice for the CEO and chairman of the board to be the same person. In other English-speaking countries, and in Continental Europe, the jobs of CEO and chairman are almost always separated. The...

When the nonexec chair is the lead director: five top tasks, as seen by a turnaround specialist.(DUTIES OF DIRECTORS)
September 22, 2005... In recent times it has become fashionable for boards to designate a "lead" director, who may (but not always) be the nonexecutive chairman. High-profile scandals have placed the spotlight on dysfunctional board oversight. From our perspective...

On being a leader: old rules vs. new rules; Think leadership means being an all-knowing deity who rules with an intimidating iron hand? Think again.(LEADERSHIP)
September 22, 2005... UNDER THE OLD RULES of leadership, the idea of building a consensus for action was considered to be time-consuming and soft. Consensus was "nice," but it was not something that needed to be achieved. The assumption was that by the definition of...

Managing CEO tenure: it's all in the contracting. The board has several good options for crafting contracts that address performance, provide for an orderly transition, and treat the CEO fairly if removed from office.(EXECUTIVE COMPENSATION)
September 22, 2005... MANAGING the tenure of the CEO is one of the most important tasks of the board of directors, but this task has become far more difficult--and even distressing--in recent years. CEO tenure is decreasing for a variety of reasons, not the least of...

Conducting a committee assessment: as more work is given to board committees, comprehensive committee assessments are growing in importance.(PERFORMANCE EVALUATION)
September 22, 2005... It's IRONIC THAT the one group with the power to decide the fate of a company--the board of directors--is the one group in an organization that is often randomly selected, rarely evaluated, and almost never held accountable. But that is...

What's an ERISA fiduciary to do? To mitigate liability risk, that is--a risk that is growing for board members. Here is a primer on ERISA retirement plan oversight.(FINANCIAL OVERSIGHT)
September 22, 2005... THE EMPLOYEE RETIREMENT INCOME Security Act of 1974 (ERISA)--the federal law that governs retirement plan management--does not articulate specific fiduciary governance processes. The absence of a statutory example of retirement plan governance...

An inside peek at PE-backed boards: a survey of directors reveals the distinctive makeup and challenges of these boards.(PRIVATE COMPANY BOARDS)
September 22, 2005... I RECENTLY COMPLETED one of the first detailed surveys of boards companies backed by venture capital and private equity (PE). Nearly 300 PE participants (both U.S. and European) responded to the survey--200 investors, 60 managers, and 30...

2006 Director's Guide to D & O Insurance: a panel of D & O experts weighs in on critical coverage issues for board members to consider.(REPORT ON D & O INSURANCE)
September 22, 2005... FOR THIS YEAR'S "Directors Guide to D & O Insurance," DIRECTORS & BOARDS asked experts from the legal, brokerage, and insurance communities to provide their analysis of important D & O trends that may affect board members and their companies...

The audit committee under examination: a spotlight on the audit committee's ever-growing challenges, evolving composition, and emerging best practices.(SPENCER STUART GOVERNANCE LETTER)
September 22, 2005... EARLIER THIS YEAR, Spencer Stuart's Financial Officer Practice explored the impact of the regulatory and legislative changes that have expanded the role and influence of public company audit committees. The study, Global Fifty: Perspectives of...

Directors Roster: a quarterly record of new director appointments sponsored by Spencer Stuart.(Board of Directors appointments)
September 22, 2005... THE DIRECTORS & BOARDS Directors Roster--a quarterly record of new director appointments--is compiled from public and private sources by the editorial staff of DIRECTORS & BOARDS, and is sponsored by Spencer Stuart. Please forward your...

Company index.(Directory)
September 22, 2005... Abercrombie & Fitch Co. Advocat Inc. Albertson's Inc. Alcoa Inc. American Locker Group Inc. Arotech Corp. Beazer Homes USA Inc. BlackRock Inc. Bluefly Inc. Bombay Company Inc. Buckeye Technologies...

Director index.(appointments of directors)
September 22, 2005... Abbott, David, Multi-Color Corp. Bogus, Donald, Olin Corp. Boystock, Roy, Morgan Stanley Brennan, Charles III, Rogers Corp. Brestle, Daniel, Abercrombie & Fitch Co. Brown, John, St. Jude Medical Inc. Brown, Julia,...

Of partnership and process: board and management must be a mutually supportive team--one that does not get bogged down in matters of process.
September 22, 2005... THE WORLDS OF BUSINESS and law have never been more closely integrated. The place where this reality is brought most sharply into focus is in the corporate boardroom. As our public company boards sit and contemplate the current concerns of...

The art of corporate governance.(FOREWORD)
September 22, 2005... In its nearly 30 years of publication, Directors & Boards has been the thought leader in corporate governance. In each quarterly issue, some of the best and brightest CEOs, outside directors, consultants and academics have tackled critical...

What does it take to be a good director? Let's get practical about director qualifications. These are the five attributes that provide the foundation for effective performance.
September 22, 2005... In the aftermath of the recent corporate governance horrors, a flurry of articles, laws, and regulations have delineated new standards for directors. Alert to opportunity, many leading business schools have created director "boot camps" to help...

The role of the outside director: if management seems too dense to benefit from your guidance, you may have the wrong management, or you may be too subtle in your stewardship.
September 22, 2005... Serving as an outside director can be an absorbing challenge because it involves balancing three important aspects of the role--representing the interests of the shareholders, making a contribution to the company, and maintaining professional...

The joys of directorship: ignore the doom and gloom for a moment, and let us count the many ways board service can reward.
September 22, 2005... My friend Cliff and I were in the cocktail lounge of an airline club at JFK Airport waiting to fly home. On this particular occasion, we philosophically mused about our enervating boardroom experience that day. The shareholders' meeting of the...

Problems with boards of small companies: based on real experience, here is a litany of dysfunctional behavior on small-company boards and what can be done about it.
September 22, 2005... Help is what small companies with revenues of zero to $50 million need from their directors. Monitoring and oversight are not enough. Neophyte CEOs, even those with prior executive experience, often do not understand the efficacy of structuring...

The smart director: good decisions are based on good information. Here are some ideas for rethinking and enhancing the information flow to the board.
September 22, 2005... The fast-paced, hyper-competitive, litigation-prone business environment that today's corporate directors operate in makes it imperative that companies have effective information flows to their boards and that directors do their homework. ...

Rediscovering advisory boards: successful advisory boards don't just happen. They are strategically planned, carefully created, and closely managed. Here are steps that can help you form an advisory board that will add value to your company.
September 22, 2005... Advisory boards, popular in the 1970s because of the international growth explosion of U.S. companies and their need to consult with foreign nationals on local strategies, were often lost or ignored by subsequent management teams in the...

Six steps to becoming a successful CEO: six issues demand major-league performance at the outset to successfully adapt to the highest corporate office.
September 22, 2005... What follows is a view of the CEO's world from what is probably a somewhat atypical perspective. I was a relatively young chief executive--I got the job one month after turning 36. My company, Hunt Manufacturing Co., with 1983 revenues of $85...

The art of building a successful company: often the starting point is having an unshakable faith based on inadequate evidence.
September 22, 2005... The business of starting and building new enterprises is one of the most exciting and fascinating, and at times frustrating, games that I think any of us in management knows. As a cofounder of Computervision Corp., and a founder of other...

What I look for in corporate performance: rationality and fairness-may not seem exacting standards, but few business managements appear able to consistently meet them.
September 22, 2005... I want to offer some perspective on management performance and on how managements can better discharge their responsibilities to shareholders. Managements may not like it, or think it desirable or socially useful, but institutional...

Seeing around corners: spotting problems before they become catastrophes is the special talent that directors have always needed, and will need even more so in the future.
September 22, 2005... A few bad apples? Enron, Rite Aid, Waste Management, Sunbeam, WorldCom, ImClone, Xerox, Tyco, Adelphia, Global Crossing, Computer Associates, Cendant, Homestore, MicroStrategy.... The overwhelming majority of CEOs and directors whom I have...

Managing business risk: fifty warning signs of impending trouble.
September 22, 2005... 1. Management with questionable ethical standards 2. Arrogant, autocratic, or highly risk-taking management 3. Start-up business or recent rapid growth 4. New products or processes 5. Recent mergers, acquisitions, or impending...