Start the Conversation
Happy New Year! 2012 is upon us and we’ll see what new words come into our boardroom conversations. Please leave your words for the next addition of the Boardroom Bingo card. First to win get to call for a 15 minute break!
Thanks for adding to the list:
Governance
RT @trustenabler: RT @MurnPost: Agreed. RT @rossahall: Governance is my worst business word of 2011. Much used. Little understood. Practiced less. #corpgov
I’ve been on a roll since my last newsletter: NACD Southern California Governance Week, Chicago, New York, and Tucson. I’m sure you can relate. I know I’ve been traveling a lot when my hotel bills exceed my monthly mortgage payment, yikes!
I had a wonderful time, and came away with clarity about the speed and connectedness that is bringing about a need for a refreshed mindset to lead the 2012 boardroom.
At Governance Week Dinner in Los Angeles
From Left: Ed Merino, Chief Justice Steele, Me & Christian M. Mitchell
With Barbara Franklin,
NACD National President
At D100 Celebration, NYC
Listening to brilliant investor and boardmember,
Jim Breyer of Accel Partners at Techonomy
I’ll let you recap 2011 as you enjoy the upcoming holidays and get ready for a new year. We’ve seen an Arab Spring and a Fall, where we’ve seen tents outside our office windows. It reminds me of a favorite song from the 1960’s “There’s something happenin’ here, what it is ain’t exactly clear.”
I’m speaking with clients to encourage them to lead the boardroom by listening and looking beyond their trusted networks and influencers.
This will be an important time to prepare for: A Winter of Activism. Give a call or email fay@riskforgood.com to prepare your boardroom to govern for speed in a hyper-connected world. The time to take action is now!
After spending time with technology thought leaders, the distance is increasing from the empowered individual who is able to organize in a leaderless manner and the boardroom’s oversight of their institution. This has reached a tipping point and is changing everything.
So–what are the lessons for companies and boards? When someone raises questions related to your practices, take a careful look and move swiftly to address concerns.
The messengers are right under your noses, if you choose to see and hear them. In the end, it’s not who the messenger is that matters, it’s what they are saying that deserves your attention.
A recent survey in Corporate Board Member magazine asked about board influence, with answers reflecting a very traditional view of networks. I challenge board chairs to think about asymmetrical information risk as a way to shape and expand information sources.
Boards that stick to this universe of influencers will be losing ground in a networked, hyper-connected world.
Which of the following groups do you believe influences your board the most?
Institutional investors 41%
Government regulators 29%
ISS and other proxy advisers 12%
Analysts 8%
Activist hedge funds 4%
Credit rating agencies 4%
Media 1%
Plaintiffs’ bar <1%
Politicians <1%
An interesting look at the Future View: Leading the Boardroom:
Recently saw Edie Weiner, a leading futurist and consultant, speak about “A View from the Future.” She addressed many issues but stressed that new and emerging technologies will continue to have massive if not disruptive affects on our organizations and the way we do business.
Weiner saw the current economic climate not as a recession but as a transformative period driven by technology that will continue to vex corporations. While companies may not be able to predict the changes ahead, boards of directors must focus on preserving the long-term viability of their organizations.
Instant technology. Throughout the conference, speakers discussed the importance of instant technologies, such as social media (Facebook, Twitter, etc.) and cloud computing—particularly the need for directors to be aware of these products in order to provide effective oversight.
In fact, during the “Reshaping the Risk Agenda” session, Chuck Noski’s (vice chairman of Bank of America and director of Microsoft) three areas that will transform risk oversight at the board level all related to the increasing pervasiveness of technology: the “consumerization” of technology, cloud computing, and the increasing sophistication of hackers.
China. Multiple sessions referenced China and the increasingly global marketplace. From futurist Edie Weiner to Honeywell chairman and CEO David Cote, speakers urged attendees to adopt a new perspective regarding fast-growing emerging markets. Specifically, Cote encouraged directors to view China as a “partner, competitor, and supplier.” During NACD chairman Barbara Hackman Franklin’s panel on “Doing Business in China,” the discussion extended to intellectual property rights.
The new consumer base. Political pollster John Zogby fascinated conference attendees with his lunchtime session on “The Way We’ll Be.” Having examined the American consumer for the past two decades, Zogby recommended that directors be aware of the new generation of consumers—the “global citizens.” Born roughly between 1979 and 1993, he said that this generation communicates and identifies themselves in a far different manner than the baby boomers.
Flexibility in business strategy. KPMG’s Mary Pat McCarthy noted that directors should know that the “unimaginable does happen.” To ensure long-term success, business strategies should be flexible enough to quickly adapt to the constantly evolving business environment. Edie Weiner advised directors to take note of the “carrots and sticks” in their businesses—observing whether short- or long-term gain is rewarded.
Recruit for the future. With these rapidly changing technologies, emerging global markets, and new consumer bases in mind, boardroom composition should reflect a set of directors that can meet future needs. During a panel on “The Next Generation of Board Leaders,” Ralph Whitworth (founder of Relational Investors LLC) suggested that boards recruit for both current gaps in necessary skill sets, as well as the gaps they expect three to five years down the road.
National Association of Corporate Directors
Fay Feeney To Be Honored Among the Year’s Most Influential Corporate Leaders
Risk for Good, Hermosa Beach, Ca (September 27, 2011) — Risk for Good is pleased to announce that Fay Feeney, CEO has been named to the National Association of Corporate Directors’ (NACD’s) 2011 Directorship 100 Persons to Watch, in recognition of her work promoting the highest standards of corporate governance.
Fay Feeney will be among those recognized at a gala dinner on November 8 at the Waldorf Astoria in New York, during the NACD Directorship 100 Forum. As CEO of Risk for Good, Fay Feeney has shown her commitment to NACD’s mission of promoting board diversity and boardroom excellence by service as Chair of the Southern California Chapter Chairmen’s Roundtable. The Chairmen’s Roundtable provides a peer-to-peer opportunity to exchange insights on leading the boardroom.
“The D100 honorees represent the most influential leaders whose decisions impact both Wall Street and Main Street and echo around the global,” said Kenneth Daly, president and CEO of NACD. “As the voice of the director, it is important for NACD to help set the standard by recognizing these visionaries as examples to others.”
NACD recently recognized the Directorship 100 honoree which distinguishes the most influential leaders in the boardroom and the corporate governance community. Honorees have demonstrated their commitment to upholding the highest standards and best practices in corporate governance, as well as helping to promote NACD’s initiatives to further boardroom diversity.
The full list is comprised of more than 100 directors and officers alongside more than 100 boardroom advocates in 13 categories. The top leaders of corporate governance chosen this year represent a range of companies including Apple, JPMorgan Chase, Coca-Cola, Walmart, Berkshire Hathaway Inc., General Electric, Unilever and Risk for Good.
The methodology to determine the NACD Directorship 100 finalists includes a review of quantitative results from an NACD Directorship survey including NACD members, search engine rankings, and qualitative measures including peer input from NACD chapters, expert review, major media references, and review by an editorial advisory board for each of the more than 1,000 nominations. Directors and Officers on the list are chosen for their individual attributes, not because of the board on which they serve on. Conversely, honorees in the Governance Institutions and Professionals are included based on the influence of the organizations they serve.
To view the full list of 2011 NACD Directorship 100 honorees, please visit http://www.NACDonline.org/2011-D100-Honorees.
About Risk for Good
Fay Feeney, CSP, ARM founded Risk for Good in 2010 to consult with corporate board chairs to use Dodd-Frank to their advantage and thrive in a digital world. Risk for Good advises corporate board leaders (chairs, lead directors and non-executive chairs) who want to leverage their time while improving boardroom performance. Risk for Good provides board leaders with the tools to navigate the disruption to their business from a social, mobile and global world.
Today’s minefields can cost your company: time, money and goodwill. Risk for Good works with your board to evaluate your exposure and leverage the opportunity from: social media, corporate social responsibility, sustainability, board composition, succession and the multitude of other areas where your board needs to manage emerging risk.
Modern boardrooms address these questions before others demand a “comply or explain” response. We use the quiet in our client’s boardroom to prepare thoughtful answers to today’s tough business questions.
To learn more about Fay Feeney and Risk for Good, visit http://www.Risk4Good.com or contact us directly at Fay @ Risk4Good.com or by telephone, 310-372-0591.
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Lately, I’ve been thinking about what is obsolete (and no longer working) for the 21st century modern boardroom. Ira Millstein sent us out the door with this challenge from our time at the Yale Governance Forum 2011. He reminded us that “Good governance requires more than compliance with mandates, it requires voluntary initiatives.”
Board chairs are granted a unique role in setting the boardroom agenda. With the privilege of leadership, they are accountable for leading change in their boardroom and supporting their CEO to focus business strategy on the future.
The KPMG 2011 Audit Committee Institute Spring Roundtable polled over 1,500 directors on managing technology risk. Click the link for the self-assessment.
Although almost 75% of the ACI responses suggest “we’re on top of technology’s rapid change,” I’m seeing a different picture emerge.
BRANDFog, a C-Suite advisory firm for the web’s social media says for executives “If You’re Not Online, You Don’t Exist”. As a board chair, it is important to have directors focused on what your CEO is doing/not doing on the web relative to reputation and brand management. This all reflects on the board’s reputation, especially in the eyes of investors and stakeholders.
Here are some indications of adoption in the C-Suite:
This is in comparison to the growth of social networking from a society perspective. Facebook alone has:
With a global reach:
So, how is a board chair going to bridge this disconnect between stakeholders, their CEO and their board with their own limited knowledge of how it works? Yes, we can write white papers and frame up questions for the boardroom. I believe it begins with a private conversation with the board chair to hear about their beliefs around technology.
Last week, I attended a “private event” that convened a dinner table with directors, academics, professional advisors and institutional investors from marquee brand firms.
I was wearing two hats: as a board member for NACD Southern California and as an independent advisor to board chairs. I was also there to share my experience as a risk expert engaged with the Twitter corporate governance community.
I was delighted to hear from the various perspectives that are adapting to a post Dodd-Frank world. More significantly, I was able to gain a better understanding from the viewpoints of others in the governance community. It is not always easy to “walk in other’s shoes.”
I also got a chance to see some beliefs expressed about social media, risk and asymmetrical information that, when expressed in public, are the equivalent of a “your zipper’s down” moment.
It was brought home when I got this response about social media as a relevant board room capability: “I run companies and chair multiple boards. I have nothing to do with social media. I am a social media outcast with no Facebook or Twitter accounts and no intention of joining these things soon. I know that this is not “mainstream,” but there were many people in the room who feel the same.”
I shared this perspective with my Twitter community and got some social media wisdom:
Douglas Y. Park
His company sure does, so he should too. MT @fayfeeney: F250 chair emails me “I… have nothing to do with social media.” #risk
Dr. Richard Leblanc
@fayfeeney @DougYPark is it any wonder hacking, privacy, business interruption, IT investment risk is so poor?
So, what can be done to save a board chair from embarrassment? Remember, if it is done right, you’ll go up a notch for your nerve and for limiting personal exposure.
1. Use Discretion
Find a way to let them know that this belief that they don’t need to learn about social media and technology negatively represents their brand and could hurt their personal reputation as a leader.
2. Be a Colleague not just Collegial
Think for a moment, as if it were you. Would you rather someone tell you, or just pretend nothing was awry? We would all like for someone to alert us in a way that was discreet and didn’t make us feel like it was a major focus of attention.
3. You See This as Having Too Much Personal Political Risk
a. This might be time for you to call in support. I consider it an honor to meet with board chairs. I find a meal together makes this an easier conversation. Telling someone their “digital zipper” is down is best done while breaking bread.
b. Print this post and leave it in the chair’s in-basket or have it sent as a pre-briefing to the board meeting.
These conversations require willingness for the board chair to see that the world is changing. Accepting the change begins with leading the way for new thinking.
My approach is to listen to the belief usually around changing (no time, not important, someone else knows about it, I get my information by management, I get emails, etc.).
Board chairs operate with a belief system that has served them well in the past, very well. When asking them to look at these beliefs, the Risk for Good model is risk-based. We talk about their perceptions around:
Our next step to engage is to get the board chair to consider replacing the beliefs we identified with a willingness to see “how it works”. This includes a personal tour of Google and other social networks specific to them, their board, company and competitors.
This is a time of great change for all of us. Some of us are faster and others are taking their time. For all, this is just the beginning and not too late for anyone to grasp the fundamentals. It reminds me of boarding a plane; we all take off together at the same time. However, you do need to get to the airport to board.
The mistake to avoid is to not say anything. The cost of not telling could be high if it appears that you knew and kept quiet. Good leaders want feedback to improve their performance.
So, here’s hoping all your “digital zippers” are right where you want them.
In today’s global, 24/7, digitally-connected work, you want to be connected to what is being said on social media about you, your board or your industry. If you need me to deliver the news to your board chair that your “digital zipper” is down, call me at 310-372-0591 or email me at fay@riskforgood.com.
Want a terrific list of who to follow on Twitter for #corpgov ? @LucyMarcus has complied a always growing list of #corpgov people to follow on Twitter.
What an honor to have moderated the Yale Governance Forum panel on: Long Term Drivers: Governance in the Cloud: Short Term Social Media for Long Term Gain
Moderator: Fay Feeney, CEO, Risk for Good
In this fast-moving, 24/7 global world, here is the “All-Star” team I want on the bus with me. With the leadership of Stephen Davis, Executive Director, Millstein Center, we conducted an experiment in the world of governance: using Twitter to get the message out at the conference.
Here are the results:
Parable on social media: For last week’s #YaleGovForum, we became the first corporate governance conference to promote use of social media. Then we reviewed results. There were 36 distinct tweeters. If you count followers for each, the total comes to an astonishing 69,786. Even figuring overlap, nearly 70,000 people worldwide saw messages from the 2011 Yale Governance Forum, which accommodated just 200 attendees. Now that is reach!
It was an exciting morning for me to give a read out of our session to the 200+ attendees over breakfast in the Yale Law School dining hall. This pictures captures the moment.
If it is a little blurry, my story is that I’m so thrilled to be in the moment that I’m vibrating. Behind me is Stephen Davis, and to his right is Anne Sheehan, CalSTRS, Director of Corporate Governance.
Here is the excerpt from my read-out:
The boardroom oversight of social media is part of a larger “new” area of Strategic Technology and Communications governance. In 2011, the world is social, mobile, global and always on. Implications for the business, driven by these factors is a game changer.
From the boardroom perspective, the areas of focus are:
1. Start thinking about using social media as an early warning, business intelligence filled with real time analytics. Your role as a director is to help the business see and use trends to create opportunities. Being engaged gives you a unique opportunity to listen in to the conversation. You can no longer wait for someone to e-mail you what is happening. You need to find a way to use the conversation to your advantage. The panel alone has a reach of over 16,000 people using Twitter. Imagine the power that having followers can bring as an opportunity and risk.
2. Think about how your business can use these social media channels to reach stakeholders and investors. We had Doug Chia speak about how J&J used their blog to get results out in real-time from their annual shareholders meeting. This is an example of using tools set up for marketing for investor relations. The progressive thinking is that investor relations are becoming investor relationships due to the on-going communications available with social media.
Another example of using social media is Best Buy. We had the pleasure of having Lisa Beth Lentini, Senior Corporate Counsel and Assistant Secretary, Best Buy Co., Inc. in our audience. She was honored with a 2011 Yale Rising Star – Go Lisa Beth.
The Best Buy customer service group uses Twitter to search for concerns around technology that are within their expertise. They reach out to help and provide support and direction. This is a way to help current and potential clients…smart strategy for the 21st century business. [Read more...]
On Thursday night, I had the honor of producing an amazing evening for the NACD Southern California chapter’s launch of their Chairmen’s Roundtable.
With me is Dr. Elise Walton, author of the working paper “The Effective Chair-CEO Relationship: Insight from the Boardroom.” A Working Paper Published by the Millstein Center for Corporate Governance and Performance at the Yale School of Management.
Many thanks to Yale’s Millstein Center for their thought leadership on the human relationship aspect in CEO & effective chair interaction.
It was a night to remember with over 85 members of the governance community in attendance representing over 110 corporate boards.
The “All Star” panel included:
Here is M. Christian Mitchell, our NACD Southern California chapter President welcoming our guests and panelists.
I’ll include some more pictures at the end of the post, but wanted to fill you in on the conversation we had and heard:
Succession:
Sharon Allen, Chairman, Deloitte LLP shared her first-hand experience in how her board planned for her succession. We had the opportunity to toast her in leaving her chairmanship, as this was her last official event before retirement.
A show of hands from the audience indicated that the discussion on board chair succession is one many boards have in their future.
My take-away from the discussion is that board chairs can add to this by zooming out on the process. Not just seeing it as chair succession, but a broader board “life cycle” thinking about directors, their roles and keeping the board refreshed.
I’m going to be doing research on this board “life cycle” process for Risk for Good clients, so please email fay@riskforgood.com or leave a comment on the blog with your ideas/thoughts/perspective on optimizing board/chair succession planning. This is an example of where chairs can lead now and next thinking.
Dr. Jane Shaw, Chairman, Intel, talked about the change in perspective she gained when she moved from the Director to Lead Director to Chairman role. She was delightful in sharing with us that she didn’t realize how much about the company she did not know. I loved that she would be transparent enough to share this with all of us.
Our table had a wonderful peer-to-peer experience during dinner. I so appreciate the work in leading the discussion — many thanks to all the table hosts. My table included Dr. Shaw, and the discussion was focused on picking and defending our top three picks from the Relationship Basics Assessment:
I’ll be checking back in with Elise, our table hosts and our NACD Southern California board on their take-aways from the event. What I left with is the knowledge that leading the board room (board chair, lead director and non-executive director) is a mission critical role. It is called many things, but the role is unique in its depth and breadth.
If you’re fortunate enough to be asked to lead the boardroom, think seriously about the now and next thinking. As board leaders, CEOs need all the wisdom available to execute on a business strategy in a rapidly changing, globally-connected world.
