What Directors Think: Changes You’d Like to See

Corporate Board Member, Fourth Quarter 2010

Interviews by Charlie Deitch, Jennifer Doll, Lisa Ferri, Randy Myers, and Daniel Weiss

What changes would you like to see in how directors do their jobs?

I think we need more director education. You learn a lot from the best practices of other people. I also think directors should get more active in knowing management besides the CEO.

James F. Lafond, 68                                                                                                                                                                                                                                                                                       Retired Management Partner, PricewaterhouseCoopers LLP, New York City                                                                                                                                                                               VSE Corp., WGL Holdings

An effective board is only effective if the people on it learn how to genuinely work and communicate with one another. You can be a smart guy and have a point of view, but if you can’t get your colleagues to come to your side, everything falls apart. That consensus-building skill is often overlooked.

Jonathan F. Foster, 49                                                                                                                                                                                                                                                                               Managing Director, Current Capital LLC, New York City                                                                                                                                                                                                                       Lear Corp, Smurfit-Stone Container

Directors need to be more probing, more fearless about asking hard questions. These are smart people, but sometimes when they’re collectively in the boardroom, you don’t get the best out of them. Ask the hard questions. Be fearless.

Raj L. Gupta, 64
Retired Chairman and CEO, Rohm & Haas Co., Philadelphia
Hewlett-Packard, Tyco International, Vanguard Group

I sincerely appreciate it when other directors come fully prepared to engage. They’ve read all the materials. They’ve been seeking outside input, looking at various data, engaging management outside the board meetings. It makes board meetings and committee meetings go much more smoothly. I’m on the audit committee at Navistar, and the people who are on that committee get external training and they’re always reading additional information. They’re very well prepared when they come. When all your fellow team members are fully prepared, it gives you extra reason to get fully prepared.

Steven J. Klinger, 51
COO and Board Member, Smurfit-Stone Container Corp., St. Louis
Navistar International

As technology changes and becomes a bigger part of how businesses are managed, I think directors are going to need to become more technologically savvy.

Thomas E. Meckley, 65                                                                                                                                                                                                                                                                                     Retired Managing Partner, Ernst & Young LLP, New York City                                                                                                                                                                                                           Cato Corp.

I’d like to see directors focus more on the big underlying threats to the company through enterprise risk management, and have discussions with outside experts if they need to on these topics. I think some boards do, but it’s a question of emboldening boards. Sometimes management feels threatened when that happens. But the goal is not to threaten management, it’s simply to make sure that board members understand the risks better.

R. Glenn Hubbard, 52
Dean, Columbia Business School, New York City
Automatic Data Processing, KKR Financial Corp., Metropolitan Life Insurance

I would like more time spent on strategic discussions and less time on routine reports and pro forma reviews and the like. I think directors these days, by and large, have learned how to read and evaluate what they’re reading and take very seriously the materials they receive in advance of board meetings. It makes little sense to me to take an inordinate amount of time to review in a PowerPoint material that the director has already seen. I would much rather have a structure where you move rather quickly to questions and discussions about material that has already been circulated in advance, not a re-presentation of the material. As a result of that, you can have more time for genuine strategic instruction and review. We have to find ways to cut out the routine and get to the substance.

Neil Williams, 74
Retired Managing Partner, Alston & Bird, Atlanta
Acuity Brands, Invesco Mortgage Capital