Disagreements with Other Directors
from What Directors Think 2003
Absolutely, I’ve been there. The answer is, if you can’t reconcile your views with the views of the larger group in some meaningful, thoughtful way and if you can’t get comfortable with what they’re planning to do, you’ve got to get off the board. I’ve taken myself off boards because of situations like that. More than 10 years ago, I sat on a board where I felt the accounting practices were so close to the edge that they were misleading and ultimately could be damaging to the company. My views were not shared by others, and so I left the board. Usually you’d want to effect change in a situation like that, but if there are a number of people aligned in a certain way and they don’t want to hear you out, you can’t do anything but take yourself out of the picture. I sat on the board of a company that was dominated by one particular family, and I thought that the process of assessing talent and compensating talent was skewed somewhat by the family dynamics. The family self-interest rose to a level that was higher than shareholder interest. There was no way to change that, and so I removed myself from the board.
Steven Dodge, 58
Chairman and CEO, American Tower Corp., Boston
Nextel Partners, Sotheby’s Holdings
I’ve had only one instance. We had an annoying board member who didn’t seem to remember from one meeting to the next what had transpired. So he was taken to breakfast. In our vernacular, “breakfast” means he was a do-over—gone. Thanks, but no thanks. He did not stand for reelection.
Peter J. Rose, 60
Chairman and CEO, Expeditors International of Washington Inc., Seattle
I have been disappointed—in the past, not with my current board—where I felt there could have been more disclosure and discussion up front about certain items. Later on we found out additional details about those situations that would have been helpful at the beginning in terms of making good decisions. In those cases, it was definitely pointed out to the chairman and the CEO that they needed to fully disclose all the pros and cons of the proposal, not 100% of the pros and 50% of the cons.
Richard W. Kelso, 66
Retired CEO, PQ Corp., Valley Forge, Pennsylvania
SPS Technologies
We’ve had investment decisions I didn’t agree with. I stated my objections in writing and gave them to the CEO and the board. I wanted to be on record.
William H. Woodhams, 65
Family Physician and Director, Westside Family Medical Center, Kalamazoo, Michigan
ProAssurance
The only times that I have been disappointed are when something has been dropped on the board at the last minute. You’re asked to look at something at the same time that you have to deal with it. Directors need time to think through information and have a good dialogue, rather than being railroaded toward a decision.
Timothy Chrisman, 57
President and CEO, Chrisman & Co., Los Angeles
Hawthorne Financial Corp., MCSi
As board members, we’re all disappointed when a well-thought-out decision turns out to be an incorrect one and as a result, shareholder value is lost. Just a few years ago, many utility companies’ boards spent a lot of time listening to advisers discuss the sector’s rosy future. States were busy passing legislation mandating deregulation, and utility companies were advised to position themselves for the tremendous growth in the deregulated sector that was just around the corner. Investment bankers were pushing the utilities for faster growth and higher returns on investment in order to attract the sophisticated investor and compete with other industry sectors.
The rest is history: Many utility companies overexpanded and aggressively diversified to the nonregulated sector. The results were devastating. Shareholder value was lost.
What did all of us, as board members, learn? We learned that our core business structure is critical. That as an organization, we should develop our own game plan for growth and stability, initiate our own strategy, stay the course, and not chase the ideas of others. That we should be very protective of our balance sheet. That we should insist that management develop a matrix for managing and measuring risk for any new endeavor. That regarding new projects, we should always ask the management team to develop a lot of what-if scenarios. And that we as board members should be prepared to challenge those assumptions and ask more questions.
C. Coney Burgess, 66
Chairman and President, Burgess-Herring Ranch Co., Amarillo, Texas
Xcel Energy
