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.

“This includes monitoring and advising the senior executive team as it develops and implements the corporate strategy. Information gleaned through social media might provide unique and relevant insights into the success of these efforts and supplement the traditional key performance indicators (KPIs) that directors use to evaluate management and award bonuses.”

The authors – Stanford Professor David F. Larker, Sarah M. Larcker and Brian Tayan – argue that social media might alert the board to risks facing an organization in a way that is not currently available. These risks might include:

Operational risk (how exposed the company is to disruptions in its operations);

Reputational risk (how protected are the company’s brands and corporate reputation);

Compliance risk (how effectively the company complies with laws and regulations)

“Why haven’t more boards of directors made certain that management has a process in place for collecting, analyzing, and responding to this information?” the authors ask. “Do boards actually know what questions to ask? Can boards distinguish between a good system for monitoring social media and a bad one?”

To begin getting your arms around this important area, here are 3 questions to ask:

1. What is the plan for monitoring social media to identify negative comments?

2. Who is responsible for responding on the social media platforms when crisis hits?

3. When is the CEO and/or board notified of a pre-determined spike in negative sentiment?

You may ask, what data can you get from real time conversations that are happening by your customers, employees and stakeholders? This is a great question, and one I’ve been doing a deep dive on. The feed of information is like a firehouse, so to make it relevant, you need to set up a point of view.

The one I’ve selected to share with CEOs, the c-suite and directors is related to the conversation-influencing investors. I’m seeing many strategic insights coming out of this investor perspective. Think Money Ball for the boardroom, and I’m feeling like the Jonah Hill character.

If you’re interested in learning more, email me at fay@riskforgood.com or call me at 310-372-0591.

Click on the image to read: Monitoring Risks Before They Go Viral: Is It Time for the Board to Embrace Social Media?

Professor David F. Larcker, Sarah M. Larcker, and Brian Tayan prepared this material as the basis for discussion.  Professor Larcker and Tayan are co-authors of the book Corporate Governance Matters. Sarah M. Larcker is Director of Account Planning at Digitas Health.

The authors would like to thank Michelle E. Gutman for research assistance in the preparation of these materials. The Corporate Governance Research Program is a research center within the Stanford Graduate School of Business.

For more information, visit: http://www.gsb.stanford.edu/cgrp/ or contact Associate Director Michelle E. Gutman at mgutman@stanford.edu.
Copyright © 2012 by the Board of Trustees of the Leland Stanford Junior University. All rights reserved.

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:

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

Happy 2012 – would love to see you at the NACD Southern California Lunch on January 24, 2012.  I’ll be moderating a session: “Corporate Strategy and Reporting in a Global Economy: The Board’s Converging Roles”

Registration is open and hope you can join me in this important conversation.

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%

Power/Influence Grid

Whoever you decide to have influence in your boardroom, keep in mind that monitoring on the low end can act as an early warning in real time.

Communication tasks you need to take on for yourself are to manage the top group, or the high power-high influence group, very closely indeed. Their communication needs should be fulfilled at all costs and on highest priority. This group of stakeholders has the most involvement as well as the most power to make things happen.

The next group, of high power yet low interest, needs to be kept satisfied with just the right amount of information. You need the information flowing to this class of stakeholder to be high quality but necessary. You cannot afford for this group to lose interest.

The class that has high influence or involvement, yet not too high in the hierarchy to also wield heavy authority is an important class. You need to keep this group really satisfied since, when the need comes, they can help you out with their involvement. Keep the fourth group in mind by listening and responding as appropriate.

Expand your network and keep surprises to your company and boardroom to a minimum.

The same survey talked about keeping your skills updated. I spend time with directors who are active in attending training. Join me in 2012 as I encourage board chairs to making training a priority for themselves and their directors.

In an age where speed is accelerating, you will likely be left behind without it. I’m encouraging board chairs to set aside time in the first quarter to learn about social media and the power of the virtual network.

You can bet your shareholders and employees will be asking, Does our board represent the past or the future?

How would you rate the adequacy of your board’s level of training?

Adequate – 57%
Fair, but could use improvement – 41%
Not at all adequate – 2%

This past quarter, I listened to many outstanding leaders in business and the boardroom, from the NACD D100 presentation by General Stanley McCrystal to Marc Benioff, CEO Salesforce. All agree – speed and networks will be game changers for business to thrive in 2012.

Resistance to the changes brought by the hyper-connected, empowered individual is futile. If you’re not ready to embrace the changes, I urge you to accept that 2012 will be the year to immerse yourself in keeping your skills up to date.

Only then will you be able to evaluate the impact of these fast-moving changes on you, your business and your boardroom.

Risk for Good is here trend-spotting for the boardroom, and welcomes a chance to speak with you on making 2012 successful for you.

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/

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.

# # #

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.

Are you challenging yourself to look beyond the status quo, to understand how changes are disrupting your business?  Is your board operating in a twentieth-century mode? If so, your business is being challenged to expand communications, attend to shareholder concerns, address issues of trust, take on new technologies (cloud, social media) and more, in order to succeed in and meet the needs of the twenty-first century.

Here is a quick look at the video on Social Networking from Mr. Chairman:

See Mr. Chairman here

Preparing Our Board Leaders for What’s Next

When most of our board chairs were deciding on a college major, the founders of Google were not yet born.  Fast forward a couple of decades (or more), and we see that the career landscape has changed so drastically that jobs need new definitions: social media strategist, app developer, mobile web engineer.

How can you prepare for what’s ahead?  Cathy Davidson has a few ideas.  She is a professor at Duke University and suggests that “65 percent of today’s grade-school kids may end up doing work that hasn’t been invented yet.”

“We’re 15 years into something so paradigm-changing that we have not yet adjusted our institutions of learning, work, social life, and economic life to account for the massive change.”

www.theiirc.org  The International Integrated Reporting Committee (IIRC)

Corporate Spring – Is it Only a Matter of Time?

Salesforce.com CEO Marc Benioff last week predicted that following the Arab ‘spring’ uprising against dictators facilitated by social media, it would only be a matter of time before similar demonstrations would unseat CEOs – what he referred to as ‘corporate springs’.

In his keynote address in San Francisco last week, he said: “We need to pay attention [to the Arab spring] because it is not so long from now that we’ll start to hear about corporate springs and enterprise springs.  We’ve seen Mubarak fall, Gadaffi fall – when will the first corporate CEO fall for the same reason?  Because of unhappy customers rising up, or not listening to their employees. Not paying attention.  Because it is more important to listen than ever before.  That is the social revolution.”

On Leading a Digitally Intelligent Board:

1.  Time is now to get your board “on board.”  Risk for Good can provide you with a briefing to level-set the board on the fundamentals of your social media risks and opportunities:

a.  Have your board briefed on social media’s impact on your business, competitors and mentions of key executives.
b.  Identify where your business is positioned in the conversation: Google, Yahoo,Bing, Facebook, Twitter, LinkedIn.  Understand the sources where you can go to gain independent information and business intelligence.
c.  Expand your sources of information on the business beyond management reporting.

2.  As you start asking digitally literate questions of your CEO, have a baseline “Social Media for the Boardroom” assessment of your company from an enterprise perspective:

a.  Know the risks on how your company is using social media;
b.  Have a map of your company’s engagement:
i.  What marketing is doing for outbound conversations, along with other departments’ usage (human resources, customer service, etc.)
ii. What is being said by whom on major social media sites:  Google, Facebook, Twitter, LinkedIn.
c.  Become familiar with your own website from a corporate governance and investor relations perspective;
d.  Identify what policies are in place for employees, contractors, etc.;
e.  Begin the discussion on your business readiness to manage crisis communication on social media;
f.   Identify how your board is being portrayed in social media. Think executive and board compensation, say on pay, etc.

Use this briefing and/or assessment to introduce your board to the fast-changing communications happening on line.

If your board is beyond this basic information, it would be great to hear how you got this ball rolling. I’d love to hear how you see this digital business mandate being managed in the boardroom. Do you see a committee taking this on in their charter, or will individual board members be stepping up with “digital expertise and skills” to guide the conversations?

As I prepare for my digital update in October at the USC Corporate Governance Summit, I’m interested in what areas you are seeing that are business critical for the content. Social growth and usage, impact on business and people, how to bring boards into the digital conversation to support their business strategy? Interesting times, huh?

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 310-372-0591 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.

Moderator: Fay Feeney, CEO, Risk for Good

• Doug Chia, Assistant General Counsel and Corporate Secretary, Johnson & Johnson
• Eric Jackson, Managing Member, Ironfire Capital
• Richard Ferlauto, Deputy Director of Policy, SEC
• Lucy Marcus, CEO, Marcus Venture Consulting
• Dina Mayzlin, Associate Professor of Marketing, Yale SOM (not in picture)

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.

3.  Early source of news: many spoke of the Japan earthquake and how their Twitter feeds were ahead of formal news organizations in getting the news out.  Imagine the impact to your business to know what is happening before it hits the news.  Good question to ask at your next board meeting: “How do we monitor social media for our business as part of our crisis management planning?”

4.   The SEC is using social media to reach investors.  They are exploring ways to use the social media tools for increased transparency.

We’ve seen what happened in the Egypt Spring, and Eric Jackson spoke of the targeting he was able to do for a call to action for investors to unseat directors on the Yahoo board.  This was in 2008 and a concept ahead of its time!  With the rapid development of social media, this investor spring is to be expected.

So, what can a board chair do to get this on the agenda?  The first step is to accept that learning about technology and social media is a boardroom skill to develop.  This is one element of leading a modern boardroom agenda.  Risk for Good leverages your time and accelerates your learning curve.  When you’re ready to take this on, think about getting these questions asked:

a.  Does our organization see the implications from social media beyond our marketing group?

b.  Do we have policies for employees to use to help them understand how to enhance and protect our brand?

c.  Who in our organization is monitoring the rapidly changing risks and opportunities from this technology?

d.  How is the social strategy evolving for recruiting, marketing, public relations, executive thought-leadership and more?

e.   At a minimum, does our board have confidence that a “Taco Bell” crisis would be handled with our brand intact?   “They took the lemons they were handed and made lemonade.”

If not, what do we need to see and do to get ready for what will be a conversation that includes our reputation?

Thanks again to a fantastic panel and an amazing experience at The Yale Millstein Center learning about the ever-evolving world of international corporate governance.  Here is the event program for your reading pleasure.

For those of us fortunate enough to be in the room, kudos to Ira Millstein and his team.  Ira, Eric Jackson said it, and I agree, “You’re a national treasure.”  Keep up the good work in keeping us open to look at what is obsolete and create space for what is new that deserves attention.

I’d welcome your comments on what  questions and activities you’d add for directors to get started building their understanding of social media.

All the tweeters together in real life.

2011 Yale Governance Forum Rising Stars

Lucy Marcus with Ira Millstein and Stephen Davis - Capturing a great moment!

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:

• Sharon Allen (chairman, Deloitte, LLP)
• Dr. Jane Shaw (non-executive Chair, Intel)
• Bob Wayman (director Carefusion, Affymetrix, formerly of Sybase, Con-Way and Hewlett Packard)
• Gary Wilson (Chairman Manhattan Pacific Partners, director:  CBRE, Yahoo!, formerly Disney and Northwest)

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:

1. Frequent and Open Communications
2. Effective Processes
3. Defined But Adaptable Roles

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.