Information and People Our Boards Need Today
from November/December 2007
Do you get enough information about customer satisfaction and employee morale?
Maybe not, but there's one surefire solution: walk around and see for yourself.
At Piedmont an unhappy customer can go to our website and direct correspondence to board members. We also do customer surveys periodically, and that information is provided to the board. When things are going smoothly and life is good, we don’t hear a great deal about customer satisfaction. But when it’s not, we’re told about that candidly in the boardroom and we get anecdotal evidence of the degree of discontent. Our job is not to respond to a specific customer but to have sufficient knowledge to steer the ship.
Aubrey B. Harwell Jr., 65
Chief Manager, Neal & Harwell, Nashville
Piedmont Natural Gas
At our company, we have directors call customers. We give everybody two or three to call and ask how things are going and how they feel about the company. We do that once a year. Employee morale is the CEO’s job.
Larry Matthews, 79
Entrepreneur, Richfield, Minnesota
Veritec Inc.
In terms of customer satisfaction, at MoneyGram we do surveys. We’ve hired outside firms to see what the customers like about us and what they don’t, and how we can improve. As far as employee morale goes, I go around to the subsidiaries and talk to everybody, and I hear things and get a sense of what’s going on. Clearly management isn’t going to hang their dirty laundry out in a boardroom, but if you’ve got your ears open as a director and you are out there and not just going to board meetings, you’re going to find out things.
Albert M. Teplin, 61
Economist, Rockville, Maryland
MoneyGram International Inc., Viad Corp.
It’s not something you normally get. And I haven’t seen nearly the amount of attention that should be paid to that. It’s not just customer and employee morale; you should have shareholder morale in there as well.
Marilyn R. Seymann, 64
Associate Dean of the Sandra Day O’Connor College of Law, Arizona State University, Tempe
Maximus
I can sense a lot about employee morale by simply walking around. If you’re in the building for a meeting, walk around the halls. For customer satisfaction, I often get feedback from friends who know I’m on the board of a company they do business with. It’s very helpful.
D. Van Skilling, 74
President, Skilling Enterprises, Palm Desert, California
American Business Bank, First Advantage Corp., First American Corp., Lamson & Sessions, Onvia
We believe the input we receive from management on employee morale and customer satisfaction is sufficient. But that said, we’ve also provided plenty of opportunities for our directors and employees to talk in meetings and more casual social settings—settings where they’ll have a chance to ask questions privately.
John M. Ballbach, 47
Chairman and CEO, VWR International Inc., West Chester, Pennsylvania
We have two methods of gauging employee morale. We take surveys and ask the HR person to review them. We also have ombudsman or whistleblower hotlines, and the directors monitor the calls on those. At one of my boards, it’s especially rigorous. We’ll get 30 to 40 calls to that whistleblower line every quarter. And we talk about all of them, because if someone’s complaining you need to pay attention and find out if there’s something bigger going on.
Gerhard H. Parker, 63
Former Executive Vice President, Intel Corp., Santa Clara, California
Applied Materials Inc., FEI Co., Lattice Semiconductor Corp.
I’m chairman of three audit committees. So one thing I do is have a brown-bag lunch with members of the internal audit committee or members of the finance department. In other cases, I’ve visited branch offices.
John T. Baily, 63
Former President, Swiss Re Capital Partners, New York City
Endurance Specialty Holdings Ltd., Erie Indemnity Co., Nymagic Inc., RLI Corp.
How many women or people of color serve on your board?
The answer is pretty pat: not enough.
We have two women on the CarMax board. One is Hispanic and the other is African American. CarMax is a retailer and our customer base is very diverse, and our employee base is extremely diverse. We are working hard to have a board that’s similar to the diversity of our customer and employee base. It’s very important.
W. Robert Grafton, 66
Former Managing Partner, Andersen Worldwide, Chicago
CarMax, DiamondRock Hospitality Co.
Women are underrepresented on boards, period. For persons of color, it’s probably even tougher. I sit on boards where we have both women and women of color, but I’m still not really happy with the mix. More needs to be done. In one company, we have a director search under way in which we are seeking diverse individuals. That could be by gender, national origin, ethnicity. We have further to go.
Bernard G. Rethore, 66
Chairman Emeritus, Flowserve Corp., Irving, Texas
Belden Inc., Dover Corp., Mueller Water Products Inc., Walter Industries Inc.
Gender, yes, on our board. Race, no. It’s been an ongoing topic on our board for quite some time. We used to be a standard WASP-y board; then we started adding in new board members and actively sought more diversity. Gender diversity was more readily found. What are we doing about it? Making ourselves available and watching for the right opportunity.
Kenneth V. Miller, 60
Principal and Partner, Havirco Inc., Kalamazoo, Michigan
Biomet Inc.
No, I’m not happy with the mix on boards. Ultimately boards have to get to the spot where they say, “I won’t take on a new director unless the person is a woman or minority.” We’ve graduated from the old school, where directors were only friends of the CEO, to now, where most everybody’s using the major search firms. The easiest way to get women and minorities is to say to the executive search firm, “You’re not getting paid unless you deliver a woman or minority.”
Lewis W. Coleman, 65
President and Director, Dreamworks Animation SKG, Los Angeles
Northrop Grumman
Our board is composed of nine directors. We have two women, and all nine members are white. Once we replace a director, it should be with a person of color or a female.
Yacov Levy, 62
Founder and Managing Partner, Levy Trajman Management Investment, Burlington, Massachusetts
Signature Bank
RehabCare has a seven-person board that includes two women and two African Americans. They were added based on their experience and credentials. One of the women is a doctor, the other is the head of nursing at Vanderbilt, and one African American is the retired head of the University of Michigan hospital system. I’m happy with the mix of the board.
Harry E. Rich, 67
Former CFO, Brown Shoe Co., St. Louis
Bakers Footwear Group, RehabCare Group
There are very few women or people of color on boards, and that clearly needs to change. If there’s the possibility of a relevant match, I try to nominate diverse candidates when I hear of board searches.
Elisabeth DeMarse, 53
CEO and President, Creditcards.com, Austin, Texas
Edgar Online, ZipRealty
