Directors & Boards articles from September 2008

Directors & Boards archives from September 2008

'MVP'.(LETTER FROM THE CHAIRMAN)
September 22, 2008... WITH THE 2008 baseball season wrapping up, sports writers will select "the most valuable player" in each league. In the National League, the past two MVPs have come from my home team, the Philadelphia Phillies. This year the Phils may have a...

Some of all fears.(Editorial)
September 22, 2008... AGREAT EDITOR is motivated entirely by fear." That was a comment made by Esquire Editor David Granger during a round of promotion interviews for the magazine's 75th anniversary issue published in September 2008. He was referring specifically to...

Hail to the chief: straight talk on corporate governance from the new POTUS.(QUIDDITIES)
September 22, 2008... THE NEW President of the United States strides into the room for a February 2009 news conference and indicates that he is ready for questions. MSNBC (Chris Matthews): As my old boss Tip O'Neill used to say, all politics is local. However,...

A textbook case of board risk: the dangers are unreal ... the liabilities are very real.(SUTTON'S LAWS)
September 22, 2008... MY WIFE and I were personally sued in a class action suit for $458 million This was roughly $459 million more than we were worth back then. You see, I chaired this college. A student group filed, charging us with false recruitment...

Acting badly . . .but without bad faith: recent court cases compel a new urgency by directors to ensure against any process failings when making critical decisions.(LEGAL BRIEF)
September 22, 2008... OVER 20 YEARS AGO, the case of Smith v. Van Gorkom sent shock waves through board-rooms across the country. In that case, the Delaware Supreme Court held that directors may be personally liable for damages in a stockholder law-suit if they were...

The long arm of the credit crisis: this is no time to be scrimping on insurance protection.(RISK MATTERS)
September 22, 2008... WHAT IS THE IMPACT of tightening credit on private companies and smaller (micro-cap) public companies? And what risks does this create for their directors? By now it isn't exactly front-page news that the subprime mortgage meltdown, which...

Risk management: roadmap to 'maturity': there are several ways to implement a risk management solution. Here is what SAP itself did.(CORPORATE ACCOUNTABILITY AGENDA)
September 22, 2008... As globalization and regulation intensify, many companies respond to these com plexities by implementing rigorous risk management processes. SAP, a global provider of enterprise management software, is no exception. SAP's initial risk...

Beware 'credenzaware': too many misguided, ignored, and abandoned initiatives diminish a leader's credibility.(COMPETITIVE EDGE)
September 22, 2008... CREDENZAWARE is the term we somewhat humorously use to describe the unrealized output of well-intended organizational studies and project initiatives that all too often find their way to the shelves, disk drives, and credenzas of senior...

'Say on pay': What the market thinks: we did the 'reaction' calculations to the passing of legislation and related shareholder-sponsored proposals.(EVIDENCE AND PERSPECTIVES)
September 22, 2008... BOTH PRESIDENTIAL candidates support what has been termed "say on pay." In general, say on pay gives shareholders an advisory vote on CEO compensation. Heated arguments have been made on both sides of the issue, yet to date there is little...

On being a successful audit committee chair: five best practices being implemented today.(AT YOUR BEST)
September 22, 2008... THE SARBANES-OXLEY ACT of 2002 (SOX) transferred powers from the management of a public company to its independent audit committee. The chair of the audit committee has the important role of providing leadership for the audit committee and of...

Getting from a good to a great board: you can do it through gender diversity. The qualified woman candidate for your board is out there--if you look for her in the right places and with the right process.(LEADERSHIP)
September 22, 2008... I'D LOVE TO PUT QUALIFIED WOMEN on our board," asserted 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...

HBS focus: the reality of corporate boards: as Harvard Business School celebrates its first century, it can take pride in being a pioneer in exploring what transpires in the boardroom ... and how it helped shape the evolution of enlightened governance.(GOVERNANCE LEADERSHIP)(Harvard Business School)
September 22, 2008... As 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...

Choosing a new CEO: this board got it right: there were three strong internal candidates, each with champions on the board. Only a rigorous step-by-step evaluation process resolved the selection dilemma to confirm the best person for the job.(SUCCESSION PLANNING)
September 22, 2008... BOARD MEMBERS know that CEO selection 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...

What should we pay board members for? Oversight responsibility? Performance of the company? Or both? This is one of the most basic issues of compensating directors ... and it is one that is rarely addressed.(DIRECTOR COMPENSATION)
September 22, 2008... OVER THE LAST DECADE, board service has changed dramatically, with much more time being spent on board and board committee matters and significantly more real, or perceived, risk associated with board service. These factors altered the supply...

Dos and don'ts for managing a monitor: worried that a compliance issue may result in a government-imposed monitor in your midst? Be proactive to help select the monitor, demonstrate remediation, and avoid disruption of the company's operations.(REGULATORY OVERSIGHT)
September 22, 2008... THE DUTY OF DIRECTORS and management of any business is to protect the company and its shareholders' interests. In today's heightened regulatory enforcement environment, an additional core responsibility of the board and good management is...

Get real with your real estate dealings: as federal regulators continue to expand the reach of Sarbanes-Oxley, directors and CEOs who sign off on conflict-ridden real estate leases may find themselves facing enforcement actions.(LIABILITY AND LITIGATION)
September 22, 2008... ENRON AND ITS PROGENY caused a dramatic shift in the regulatory paradigm for American business. The excesses of off-balance-sheet financing, blatant conflicts of interest, and directorial inaction on which Enron helped focus global attention...

For your more robust personal protection: yes, you need a personal indemnification agreement ... and here is what should be in it and what it should cover.(DIRECTOR LIABILITY)
September 22, 2008... DIRECTORS AND OFFECERS of corporations face the risk of personal liability for actions performed and decisions made on behalf of the corporation. Perhaps unknowingly, many directors and officers unnecessarily accept an enhanced risk of personal...

Book it: best bets for board reading: from a roundup of new books, leadership insights on executive humility, CEO tone deafness, managerial development, the problem with pocket vetoers, and interweaving the work/life fabric.(LEADERSHIP)
September 22, 2008... 'That's not the real story' From How We Lead Matters: Reflections on a Life of Leadership by Marilyn Carson Nelson with Deborah Cundy. Copyright 2008 by Marilyn Carson Nelson. Published by McGraw-Hill (www.mhprofessional.com). ...

He was the CEO, so everyone laughed.(LEADERSHIP)
September 22, 2008... From Making Your Point: Communicating Effectively with Audiences of One to One Million by David Bartlett. Copyright 2008 by the author. Published by St. Martin's Press (www.stmartins.com). THE ABILITY TO TELL FUNNY JOKES is a gift. Most...

How EMC's CEO quashed the 'pocket veto'.(LEADERSHIP)
September 22, 2008... From How the Wise Decide: The Lessons of 21 Extraordinary Leaders by Aaron Sandoski and Bryn Zeckhauser. Copyright 2008 by the authors. Published by Crown Business, a division of Random House Inc. (www.randomhouse.com/crown). EVEN IN A...

GE's secret weapon.(LEADERSHIP)
September 22, 2008... From Talent Is Overrated: What Really Separates WorldClass Performers from Everybody Else by Geoff Colvin. Copyright 2008 by the author. Published by Portfolio, a member of the Penguin Group (www.penguin.com). [ILLUSTRATION OMITTED] ...

A moment that changed a career.(LEADERSHIP)(Column)
September 22, 2008... From Total Leadership: Be a Better Leader, Have a Richer Life by Stewart D. Friedman. Copyright 2008 by the author. Published by Harvard Business Press (www.harvardbusiness.org/press). [ILLUSTRATION OMITTED] BY THE MID-1980s, my...

Joining the board of a PE-backed company: what to expect when a private equity firm taps you to provide oversight to one of its portfolio companies? Here are several important differences in such service and in the contributions you will be expected to make.(HEIDRICK & STRUGGLES GOVERNANCE LETTER)
September 22, 2008... FOR INDEPENDENT DIRECTORS, service on the board of a company backed by a private equity (PE) firm offers exposure to unique professional, and potentially financially rewarding, opportunities. The attractions of such service cited by current and...

Directors Roster: a quarterly record of new director appointments.(DIRECTORS & BOARDS' DIRECTORS ROSTER)
September 22, 2008... THE DIRECTOES & BROARDS 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 Heidrick & Struggles. Please forward...

The heart of the matter: good governance depends on good relationships between the management and the board. Sounds simple and straightforward? It's not.(ENDNOTE)
September 22, 2008... IN ITS 2004 Principles of Corporate Governance, the international Organization for Economic Cooperation and Development (OECD) describes corporate governance as "a set of relationships between a company's management, its board, its shareholders...