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
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...]