"By adopting these rules, we will improve the disclosure around risk, compensation, and corporate governance, thereby increasing accountability and directly benefiting investors,” Chairman Mary Schapiro said in her opening statement at this week’s Securities and Exchange meeting.
The rules will be in effect by the 2010 proxy season and could be published as early as next week.
Do boards understand that they are being challenged to communicate more openly with their shareholders? Better communication gets to the heart of many of the governance issues that the SEC and the pending legislation hope to address.
So what’s a board to do?
Boards should think in concrete terms about what they have communicated with their shareholders in the past and how they can improve the clarity of communication. They should avoid legalese and adopt plain English in their discussion about risk, compensation and governance.
Greater disclosure is about clarity. Boards are in a communication battle they can win if they recognize the element of respect in their communication with the company’s owners.
For more resources about Board – Shareholder Communication, please visit http://ping.fm/N5ZGH
Friday, December 18, 2009
Wednesday, December 16, 2009
It Takes Time to Be an Effective Director
Bill McCracken joined CA, Inc. in 2005 as chairman of its Special Litigation Committee when the company was operating under a deferred prosecution agreement after it was rocked by scandals that included the conviction of several executives including its CEO and Chairman for fraud.
A case study in corporate rehabilitation, McCracken focused on the culture of CA, which he saw as a board responsibility. McCracken describes the continuation of the company’s journey to excellence as “we’re in the fifth chapter of a 10 chapter book.”
In his panel discussion for the NACD Conference on Governance, McCracken also revealed that he believes the job of the lead director or chairman as requiring significant time—one and a half to two days a week or six or seven days a month.
Directors acknowledge a new environment where every director is spending more time on respective board assignments, especially the chairs of the audit or governance committees of the board.
McCracken took the unusual step of hiring an executive coach to help board members learn to work together and establish a company culture focused on transparency, teamwork and collaboration. “It takes time and effort to build trust.
McCracken also observed: You can’t do both jobs—serving as chairman and CEO. He has taken over as interim CEO as they search for a new CEO.
“The Chairman runs and manages the board and the CEO runs the company.”
Perhaps attending quarterly board meetings and an occasional telephonic meeting were the typical director time commitment a generation ago, but not today. Certainly, for the board to understand the risks in a corporate strategy means a much greater time commitment.
It’s a bigger job today. Without an increased time commitment and an ability to work well together, “all that experience of the directors does not get engaged.”
Clearly, management needs to take full advantage of directors and the experience they bring for the long-term growth and benefit to the company and its shareholders.
For more information about successful communication within your company and with your shareholders, please visit http://ping.fm/hoB5z
A case study in corporate rehabilitation, McCracken focused on the culture of CA, which he saw as a board responsibility. McCracken describes the continuation of the company’s journey to excellence as “we’re in the fifth chapter of a 10 chapter book.”
In his panel discussion for the NACD Conference on Governance, McCracken also revealed that he believes the job of the lead director or chairman as requiring significant time—one and a half to two days a week or six or seven days a month.
Directors acknowledge a new environment where every director is spending more time on respective board assignments, especially the chairs of the audit or governance committees of the board.
McCracken took the unusual step of hiring an executive coach to help board members learn to work together and establish a company culture focused on transparency, teamwork and collaboration. “It takes time and effort to build trust.
McCracken also observed: You can’t do both jobs—serving as chairman and CEO. He has taken over as interim CEO as they search for a new CEO.
“The Chairman runs and manages the board and the CEO runs the company.”
Perhaps attending quarterly board meetings and an occasional telephonic meeting were the typical director time commitment a generation ago, but not today. Certainly, for the board to understand the risks in a corporate strategy means a much greater time commitment.
It’s a bigger job today. Without an increased time commitment and an ability to work well together, “all that experience of the directors does not get engaged.”
Clearly, management needs to take full advantage of directors and the experience they bring for the long-term growth and benefit to the company and its shareholders.
For more information about successful communication within your company and with your shareholders, please visit http://ping.fm/hoB5z
Tuesday, December 8, 2009
A Key Board Responsibility: Do the Right Thing
Whether you are serving on a public or private company board, there is an important principle to guide you: doing the right thing, not just for the constituency that brought you to the board but for all the shareholders, according to Michel Feldman, partner in the Chicago office of Seyfarth Shaw, who has served on a number of private company and public boards.
“Especially when you are asked to be on a private board, be sure that you understand what you are getting into,” said Feldman at an NACD Chicago panel. In private companies, it’s especially important to beware of a dominant CEO.
“And always, do the right thing, for all shareholders.”
For more insight on corporate communications, boards of directors and shareholder relations, visit www.karenkaneconsulting.com
“Especially when you are asked to be on a private board, be sure that you understand what you are getting into,” said Feldman at an NACD Chicago panel. In private companies, it’s especially important to beware of a dominant CEO.
“And always, do the right thing, for all shareholders.”
For more insight on corporate communications, boards of directors and shareholder relations, visit www.karenkaneconsulting.com
Monday, November 30, 2009
Why CEOs Should Blog
CEOs need to see themselves as their own media company. It’s not just about being interviewed by The Wall Street Journal or CNN, but framing the discussion you want to have and reaching out to your clients and customers in your own voice.
Write a blog. It gives you a chance to connect to your audiences in a very authentic way. It’s about having a dialogue rather than a press clip.
Do it now. The field is yours: not many CEOs are blogging.
Blog to establish leadership. Blog to get customer feedback.
Start the conversation.
Write a blog. It gives you a chance to connect to your audiences in a very authentic way. It’s about having a dialogue rather than a press clip.
Do it now. The field is yours: not many CEOs are blogging.
Blog to establish leadership. Blog to get customer feedback.
Start the conversation.
Friday, November 20, 2009
Boards Should Show Leadership in Corporate Governance
With unprecedented interest in corporate governance, the Chicago NACD Chapter panel of Holly Gregory, Fred Steingraber, Donna Zarcone and William Atwood addressed Changes in Regulation and Implications for Directors.
Panelist Fred Steingraber, former Chairman and CEO of AT Kearney and director of several US and several international boards, said the time for boards to react was over. Rather, boards should take a leadership position by demonstrating that they provide value through their oversight through transparency and better shareholder communication.
“Boards are in the midst of a very serious struggle to regain respect and control over their growing responsibilities and image,” said Steingraber. “To accomplish this will require demonstrating the will and capacity to make changes ranging from board organization/leadership, policy, process, committees, board composition to shareholder communications. They must now demonstrate leadership at the board level with a results orientation in the conduct of their work.
“Today, the government is taking control of boards, largely due to directors not building good relations with shareholders and all too frequently being too defensive and too reactive in their communication.”
Boards need to break their silence to retain and regain control rather than ceding authority to critics.
Not only do boards need to listen to shareholders to understand their concerns, but they also need to go beyond the derivative information that they normally receive to drill down to the underlying issues of business performance, said Steingraber. “Boards need to put together a longer term program that addresses the issues of succession planning and risk management. This will not happen overnight.” For that reason boards need to lead by creating a framework for change and communicate those changes, which will take place over time
Panelist Fred Steingraber, former Chairman and CEO of AT Kearney and director of several US and several international boards, said the time for boards to react was over. Rather, boards should take a leadership position by demonstrating that they provide value through their oversight through transparency and better shareholder communication.
“Boards are in the midst of a very serious struggle to regain respect and control over their growing responsibilities and image,” said Steingraber. “To accomplish this will require demonstrating the will and capacity to make changes ranging from board organization/leadership, policy, process, committees, board composition to shareholder communications. They must now demonstrate leadership at the board level with a results orientation in the conduct of their work.
“Today, the government is taking control of boards, largely due to directors not building good relations with shareholders and all too frequently being too defensive and too reactive in their communication.”
Boards need to break their silence to retain and regain control rather than ceding authority to critics.
Not only do boards need to listen to shareholders to understand their concerns, but they also need to go beyond the derivative information that they normally receive to drill down to the underlying issues of business performance, said Steingraber. “Boards need to put together a longer term program that addresses the issues of succession planning and risk management. This will not happen overnight.” For that reason boards need to lead by creating a framework for change and communicate those changes, which will take place over time
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