from January/February 2009
by Colin Leinster
Business has always been populated by fascinating men and women, often people who seized opportunities they identified during particularly challenging times. I’ve no doubt the turmoil we’re going through now will produce another crop, many of them occupants of the corner office or boardroom.
Our four cover stories offer readers ideas about how to get a better handle on today’s troubles and exploit them. The article on risk oversight, surely the director’s biggest challenge, describes how some boards use risk to their advantage. “ Why Directors Should Think Like Henry Kravis” explores a Harvard professor’s provocative theory that boards may do better by their shareholders if they take a more active role in their companies’ management. It’s a common practice among outfits owned by private equity firms but heresy on public boards; maybe the times require some blasphemous thinking. “ So Goldman Sachs Is Now a Bank” offers a new perspective on an industry that, like it or not, boards will always have to live with no matter its form. This piece was written by Charles Ellis, author of The Partnership, a best-selling history of the top investment bank, and in essence picks up where the book leaves off, with the federal bailout. “ Shareholder Suits: You Ain’t Seen Nothing Yet” bears tidings of a sad nature. It reports that the economy’s collapse will hit directors with a fusillade of shareholder suits and regulatory prosecutions. Compulsory reading, I’d say.
A company in crisis needs to tap all the boardroom talent it can, hence “ Getting Back on the Diversity Track.” Corporate Board Member opposes quotas—but we do believe in recruiting the best, which means crossing gender and racial lines. Our company has formed a diversity council, eight men and women (Asian, African American, Hispanic, white) who will help us put together conferences and other programs aimed at widening boards’ knowledge of and familiarity with a broader spectrum of potential directors and promoting diversity within companies as a whole.
The members are Wilson Chu, a partner at the Haynes & Boone law firm and general counsel of the Committee of 100, an association of Chinese American leaders; Bonnie G. Hill, president of B. Hill Enterprises, a consulting firm (she serves on the boards of Home Depot and Yum! Brands, among others); John A. Krol, retired chairman and CEO of DuPont (he’s a director of ACE Ltd. and Tyco International); Ancella B. Livers, executive director of the Institute for Leadership Development & Research at the Executive Leadership Council, a group that promotes networking among African American executives; Cheryl E. Mayberry McKissack, CEO of Nia Enterprises, an online publishing, research, and marketing-services company (she is a director of Deluxe Corp. and PrivateBancorp Inc.); Carlos F. Orta, CEO of the Hispanic Association on Corporate Responsibility; Sheli Z. Rosenberg, director of the Women’s Issues Network Foundation (she is on the boards of Caremark Corp., Equity LifeStyle Properties Inc., Nanosphere Inc., and Ventas Inc.); and Deborah M. Soon, vice president of marketing and executive leadership initiatives at Catalyst Inc., which helps expand business opportunities for women.
We all look forward to working with them.