Regrets, We Have a Few
from November/December 2007
If you could change one thing about board service, what would it be?
Red tape and bureaucracy, go away; let us concentrate on strategy today.
It would be the board’s potential exposure to extended liability.
Mark R. Bernstein, 77
Formerly Of Counsel, Parker Poe Adams & Bernstein LLP, Charlotte, North Carolina
Family Dollar
I would change all the red tape and bureaucracy and forms and procedures that go with it. All the corporate governance compliance rigamarole is a real headache. Filing the forms, getting the minutes documented, the whole process is onerous and routine and monotonous. If I could wave a magic wand, I’d forget about those things and focus more on strategic direction and future. Realistically, I do believe that smaller boards, those that have between five and 10 members, are often far more constructive and productive than larger ones.
D. Keith Cobb, 66
Consultant, Fort Lauderdale, Florida
Alliance Data Systems Corp., BankAtlantic Bancorp, BFC Financial Corp.
I think Sarbanes-Oxley and its precursors, Enron and WorldCom, have made auditors less friendly. That’s partly for a good reason. But there was a time when you could take an issue to auditors and they’d help you sort out the right thing to do. There’s less of that now. Granted, auditors should be minding the store, but they should also be there to help you deal with the very complex corporate issues that arise. You don’t need auditors who are running around playing gotcha.
Stephen R. Lewis Jr., 68
President Emeritus, Carleton College, Northfield, Minnesota
Valmont Industries
I’d change the basis on which directors are picked. There should be more emphasis on industry knowledge and experience within that industry. I think a lot of board members are good people, and smart, but don’t have relevant experience in the industry.
Frederick Frank, 75
Vice Chairman, Lehman Brothers Inc.,
New York City
Epix Pharmaceuticals, Landec Corp., Pharmaceutical Product Development
I’d like to have more time to prepare important matters in compliance with regulations. Information technology helps us get quarterly results very quickly. Then we like to get our outside auditors to bless them while we review and analyze their meaning. The time between that point and reporting them publicly in a timely fashion is somewhat limiting.
Louis P. Valente, 77
Chairman, Palomar Medical Technologies, Burlington, Massachusetts
MKS Instruments, SurgiLight
I’d try to change death by PowerPoint. Management needs to be able to portray the vital signs of a business in a cogent, tight manner. Management shouldn’t come into a meeting with a PowerPoint presentation, some of which they sent to you beforehand, and go through the whole deck.
Anthony W. Schweiger, 65
Founder and CEO, Tomorrow Group LLC, Conshohocken, Pennsylvania
Paragon Technologies, Radian Group
Looking back on your years as a director, what tough decisions make you proudest—and which ones would you make differently now?
Pride runneth over, starting with the day we got a rogue lawyer disbarred.
We’re facing a tough decision right now on one of my boards. We have somebody trying to cheaply take over the company. He owns 100 shares and wants to put three people on the board. It’s just bizarre. This company came back from the dead in the last four years when we installed a new management team, restructured the company financially, and sold off some operations that were a drag on the company. The stock went from 15 cents to $16. And now we have some interloper coming in from the outside who wants to take over the board.
William C. O’Neil Jr., 73
Private Investor, Nashville
Advocat Inc., American HomePatient, Healthways Inc., Sigma-Aldridge Corp.
I’ve been on various boards for the last 20 years. The decisions that make me proudest were where I as a director and we as a board saw red flags, quickly put ourselves in crisis mode, and solved those problems in a way that saved the company from regulatory exposure and helped the business continue as a public company. In terms of doing something differently, there’s a tendency when a crisis is solved to consider the issue closed. But the second phase is for the board to further evaluate management. In a couple of situations, the biggest mistake has been not replacing senior management.
William Lerner, 72
Attorney and Corporate Governance Consultant, Washington, Pennsylvania
MTM Technologies Inc.
I once had a lawyer on the other side of a takeover battle suggest that if I would cooperate and help convince my people to accept the offer, I would be incredibly well compensated for it after the acquisition was over. I told him where he could go and walked out of the meeting. Later it turned out that he was recording our conversation and obviously looking to blackmail me into cooperation. He was disbarred.
Bruce Mann, 72
Senior Partner, Morrison & Foerster LLP,
San Francisco
Ceva Inc.
I’ve been a director for more than 20 years. I guess the decision I would be proud of was encouraging a company to pursue certain product areas. The one that I’d do differently involved a CEO who should have been removed sooner than he was. We had made some significant strategic blunders which were very costly to the business, and the CEO basically walked away unscathed. My regret is that I was not successful in convincing my fellow board members that this was what we should do. We eventually got there, but it should have been done much sooner than it was.
Dick Leaman, 73
Former CEO, S.D. Warren Co., Boston
Church & Dwight Co.
One of my proudest moments was telling a chairman and CEO that one of the company founders was stealing money from the company. The founder resigned and paid back the money. Later he said, “Now that this is all behind us, I hope we can be friends.” And I remember thinking that I might be friendly, but we would never be friends.
Paul D. Lapides, 52
Director of the Corporate Governance Center, Kennesaw State University, Kennesaw, Georgia
Internet Commerce Corp., Sun Communities Inc.
We once had to remove a company’s CEO. This was very difficult, as the individual was a good person, a hard worker, and relatively successful. But there was too much dissidence between the CEO and the board chairman, and the board had to make a choice. We made the right one, but I wouldn’t call that a proud decision. One thing I would change was how we handled a whistleblower’s complaint about a different CEO. It escalated way too fast. The complaint was based on an overheard rumor, and we launched into an investigation that damaged the board’s relationship with the CEO. After an intensive investigation, the allegations were found to be untrue. We decided to modify our policy to have complaints of this nature investigated by uninvolved executive staff members before any escalation. We are now closely watching the modification in policy to ensure that we don’t squelch honest complaints.
Myron Z. Holubiak, 60
Senior Partner, 1-800-Doctors Inc., Woodbridge, New Jersey
BioScrip Inc., Nastech Pharmaceutical Co.
I have been a trustee or director for more than 30 years. I guess what I look back and take a fair degree of comfort from is that
I think the typical board today is doing a far better job than ever. They’re a good deal more involved in strategic thinking, and are spending more time in independent thought about questions pending. The trend line in terms of how directors do their job has been positive. I think directors have always wanted to do a good job, but it hasn’t been as clear in the past as it is today that it requires real independent thinking. There was a time when if there were disagreements they almost never surfaced; collegiality was thought of as the most important thing. The Sarbanes-Oxley legislation clearly contributed to the shift, along with the difficulty of companies like Enron. But more than anything else, I think it’s internal: Individual directors have a better grasp of the real responsibilities and want to do a good job.
Neil Williams, 71
Former General Counsel, Amvescap PLC, London
Acuity Brands
