Social Media and #CorpGov – 2012 ICGN Rio Annual Conference

Yes, I’m here in Rio for the ICGN Annual Conference.  Here are my remarks for the panel on Social Media and Corporate Governance.  Let’s get this conversation on social media happening with CEOs and their boards.  It is too important to building trust and transparency.

 My Remarks:

Ola, Stephen, Santiago and the ICGN conference committee for including me in this amazing event.  For the past 15 years I’ve been active in engaging the internet and social media for my business & personal development.  As a result, my colleagues in corporate governance have labeled me the “Digital Whisperer”.  Today I’d like to share some of my experiences and “lessons learned” with you.

We are early in the internet age.  This 2nd generation of the internet (web 2.0) is where individuals, investors, activists and companies can use the web as a media platform to shape the perception of their company and their board.  You control your own site, or blog, or tweet; and are able to control your own data.  The importance of the company’s web site is well understood by most of us.

Less understood is the importance of interactivity, another key feature of web 2.0.  Being “social” in the digital age means creating the opportunity for user-generated content on line, and using this interactive feature to exchange information.  We know these applications such as: Facebook, Linked In, Blogs and Twitter.

In the first wave of the digital economy, the focus was on one-way conversations corporations were having with their customers.  The marketing department was in charge of overseeing that information was carefully controlled and distributed.  Marketers are known for talking, not listening.

We are now in the second wave of the digital economy.  Two way connections will dominate with less hierarchy, not more hierarchy.  Information about your company, its products, and its policies can no longer be carefully controlled and distributed.  As you and your board become digital citizens, you will be leading socially enabled enterprises with your stakeholders, your board members, and your key investors.

Take a moment to think where you were 8 years ago in 2004 when Facebook was being launched.  I was sitting with CEOs in their boardrooms briefing them on what I was seeing in their operations from a risk, safety, health, and environmental perspective.

I had limited time with them so my job was to inspire them to improve their profits by enhancing the safety and sustainability of their workplaces and products.  This included focusing on the people, products, use of resources and supply chains that made them money.  The way to focus on these audiences is to listen to them.

Investors, stakeholders, and the employees on the loading dock all have ideas for improvement and an opinion about the job management is doing.  This has always been the case.  What has changed is that now several platforms exist for these individuals to communicate their ideas and attitudes.  They now find, nearly instantly, that these ideas and attitudes are shared by their peers.  When their opinion captures the sentiment of others, then “word of mouth” becomes magnified at large scales with customers, employees, investors and activists.  These events become opportunities or risks, and can quickly shape a company’s future.

The impact of social media on corporate governance is a new concept.  It is not yet embraced by most boards.  We are literally building the plane as we fly.  My training and expertise is in risk management.  For the last 8 years I have been applying fundamental principles of enterprise risk management to social media.  Today I will share some of these findings. [Read more…]

“Like” It or Not: Business under the Magnifying Glass

The information explosion unleashed by the Internet has been magnified in the last five years by social media, and it is changing the world.  Beyond Facebook “Likes”, public opinion has created an on line perception about products, companies, and their policies.

The initial premise of “social media” is simple: Being “social” in the digital age means creating and exchanging user generated content on line.

Read what CEOs, chairmen, and lead directors need to know about social media to empower them, and in turn their boards, to be more effective in leading their corporations and exceeding shareholder expectations.

To read the entire blog post please hit this link to Boardmember.com


Hiding Behind the Boardroom Doors

I’m watching with interest how companies are adapting to the public conversation happening in print and on social media. Proxy season is in full swing and votes are being made for and against management and their boards. New criteria is being set in 2012 for directors including those against votes on length of terms (10+ years.) Sequoia Fund released a letter asking investors to vote against Goldman Sachs’ director James A. Johnson, characterizing his tenure as “at the center of several egregious corporate governance debacles.”

Add to this the recent investigation at Walmart on a Mexican bribery scandal that dates back to 2005.  The NY Times WalMart expose has my attention. BusinessWeek reporter Diane Brady wrote a recent piece titled: Walmart, Avon Execs Should Stop Hiding Behind Boards. “When a company resorts to issuing statements through a spokesperson, it’s essentially telling shareholders the chief executive isn’t up to facing the public. Maybe that’s a wise course of action as far as the board or corporate counsel is concerned, but it reneges on a basic pledge to the company’s shareholders.”

Let me share my perspective: “Boardrooms today have windows and the public is looking in.” The world is watching and listening. We now expect leaders to keep us informed on their activities related to our shareowner’s interests. The days of hiding are over, as one billion people are talking among themselves about you.

So I urge you to speak with your CEO and board about building trust by facing the public. It starts by broadening your vision of who matters to your business success. It is critical that you start listening to the conversation happening outside the boardroom.

The Boardroom in the Digital Age

“The time is ripe for executive-suite discussions on how to lead and to learn from people within      your company, marketers outside it and, most of all, your customers.” ~McKinsey

 

 

Creating a Data-Driven Culture

But what does a CEO or informed director need to do to oversee the social media conversation? First, they need to decide that the time is now to learn about social media and how the pieces fit together. If you’ve been too busy, the time to learn is now. This is a customer, an investor, an employee issue and more.

It begins with monitoring and listening to what is being said about your company. There is data that is waiting to be analyzed, but you need to be ready to bring digital intelligence to your business thinking. Let’s keep this in perspective–I’m not suggesting a CEO or director should communicate using social media (Facebook, Twitter, LinkedIn, to name a few), however, they should ensure that they get briefed on the conversation happening around their business.

How else can you ask good questions about what is being said that could impact your revenue, reputation and more? Here is a recent Stanford Graduate School of Business article that does a great job of looking at the risks associated with social media and the boardroom.

I’m pleased to be quoted and want to help you think about how this affects you, your CEO, boardroom and business: “Directors are responsible for oversight of the corporation,” says the Stanford GSB paper. [Read more…]

Corporate Strategy and Reporting in a Global Economy: the Board’s Converging Roles

I had the honor of producing a panel at NACD Southern California on January 24, 2012.

Here is a recap of the panel and the slides. Stay tuned as there is more to come on shaping this important topic for the boardroom.

Here is the NACD Blog Post:

That Sustainability Show: Heartland, SoCal Chapters Jump Start NACD’s “Why GRI?” Program

Our slide deck:

View more presentations from FayFeeney.

Boardroom Bingo

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

[Read more…]

Board Chairs: Are You Playing Catch-Up in a Hyper-Connected World?

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 ActivismGive 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%

[Read more…]

Future View – Transformation & Technology

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.  

http://blog.nacdonline.org/

Press Release: Fay Feeney Named to Prestigious 2011 NACD Directorship 100

National Association of Corporate DirectorsNational Association of Corporate Directors - Directorship 100 - People to Watch

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, 310-902-3727.

# # #

Boardroom Digital Literacy – R U Talking to Me?

Boardroom protocol is being exposed every day on the internet.  Does Rupert Murdoch really think we can’t see beyond his prepared remarks to determine for ourselves the “tone at the top” coming from his boardroom?

This past week we heard from fired Yahoo CEO Carol Bartz.  No need for board activists to add to the conversation from the outside.  We now are getting the inside scoop when we learned of her accusing Chairman Roy Bostock, of board mistreatment.  In the same Fortune interview, she called her fellow directors “doofuses” and said they “f—ed me over.”

It may be surprising to see the boardroom portrayed like this in mainstream media, but imagine what happens when 100 million people on Twitter can now get involved in the conversation.

I know that many people in the boardroom are still on the sidelines about social media.  What will it take to get your board ready to tackle their willingness to learn what is happening on the internet?  Will it take seeing your company’s name in the news before you add digital literacy to your director’s education?  I can see the incredulous look on the directors’ faces when the board is called on for their oversight of digital issues.

I can only imagine a board being characterized as:

 “illiterate”: showing or marked by a lack of personal knowledge with the fundamentals of a particular field of knowledge.

Or maybe a board will be portrayed as “ignorant”: Lacking knowledge, information, or awareness about something in particular: “ignorant of social media”.

Worse yet is as a board leader to know that it is true.  So I ask, when are you planning to get digital and social media on your agenda?  Who is going to be responsible for taking action to get it on your fall board agenda?  Whatever title you have in the boardroom (board chair or lead directors), you are setting the boardroom agenda.  Are you waiting for your CEO, Corporate Secretary, Corporate Counsel, Audit Committee Chair to bring resources and spend budget to get this to happen for you and your board?

Time to learn where your customers spend their time

Social media accounts for 22.5 percent of the time that Americans spend online, according to “State of the Media: The Social Media Report.”  This is compared with 9.8 percent for online games and 7.6 percent for e-mail.  You can read more in the NY Times.

This is a voluntary opportunity for you to keep your board current and relevant.  If you’re waiting for a regulatory push to get your boardroom thinking digitally, you may not be ready to take action and learn what is happening 24/7 on computers and mobile devices around the world.

Here are some statistics about digital connectivity to help you consider moving this up as a priority.  Digital knowledge leads to opportunities for companies to grow, reach and help their customers, employees, investors and stakeholders.  Are your business revenues connected to connectivity in Asia?  Has digital connectivity impacted new patterns in:

  • Consumer and supply chain behavior?
  • Operating model innovations?
  • Security and transparency issues?

Connectivity in Asia:

Growth in mobile Internet usage is outpacing them all:

  • 45% of metro Chinese are online via a mobile device at least monthly, up 21% from 2010
  • 11% of metro Indians access the mobile net monthly, up from just 1% in 2010.
  • Japan saw the biggest jump in mobile Internet usage: 57% of adults now have access, up 24% from last year. [Read more…]

How To Tell Board Chairs Your “Digital Zipper” is Down

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:

  • Only 5% of all Fortune 500 CEOs are on Twitter
  • 64% of CEOs are NOT engaged on company or social websites
  • Only 13 Fortune 500 CEOs have active Twitter accounts
  • Only 4% of global CEOs have a profile on Facebook or LinkedIn

This is in comparison to the growth of social networking from a society perspective.  Facebook alone has:

  • More than 750 million active users
  • 50% of active users log on to Facebook in any given day
  • Average user has 130 friends
  • People spend over 700 billion minutes per month on Facebook

With a global reach:

  • More than 70 translations available on the site
  • About 70% of Facebook users are outside the United States

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:

  • Susceptibility: belief that not focusing on technology risk on their business could cause loss.
  • Severity: consequences of not taking action are serious enough to be avoided.
  • Barriers: institutional, people, resources, resistance to change, belief and attitudes, education, training, etc.
  • Benefits: connecting to real-time data and extending relationship reach are necessary for future strategy and performance.

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 310-902-3727 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.