Want to Expand Your Weltanschauung?
from March/April 2008
by Julie Connelly
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Exhausting international flights and time-zone changes. Cups of tea to keep from losing your temper. Formal dinners where the men won’t pick up their cutlery until the only woman at the table picks up hers. Wee-hour conference calls. Tickets to this year’s Summer Olympics in Beijing. These kinds of demands, palliatives, cultural niceties (okay, good manners), and rewards are part of what awaits the American who joins a foreign board. They also help explain the affection that Irene Miller, 55, CEO of the investment and consulting firm Akim Inc. in New York City and a director of Spanish retailer Inditex, has for the work. “I like what a foreign board does for my weltanschauung, my worldview,” she says. “Growth and experience is what I’m interested in. Serving on a foreign board causes me to learn more about the world.”
A number of U.S. directors are on this learning curve. While the total is still relatively small—Corporate Board Member’s database shows that 895 Americans served as directors of foreign companies in 2007—the demand has tripled over the past five years, says George Davis, co-leader of the board consulting practice at Egon Zehnder, an international search firm. He expects the growth to continue.
Finding experienced directors who are prepared to join a foreign board isn’t necessarily easy, recruiters say. “We’ll be turned down more than normal because of the time constraints,” says Julie Daum, who runs the Spencer Stuart search firm’s board services practice. Gail de Planque, 63, a former commissioner at the U.S. Nuclear Regulatory Commission and president of her own consulting outfit, Strategy Matters, certainly puts in the hours. Her work as a board member of natural-resources giant BHP Billiton “runs to about 60 days a year,” she says, and includes 21-hour flights between her Maryland home and the company’s headquarters in Melbourne, Australia, visits to mines and oil rigs, and face-to-face meetings or conference calls with fellow board members.
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Nokia director Daniel Hesse, who's 6 foot 5, squeezes aboard red-eye flights to Europe for board meetings. |
back to the U.S. “So I’m really only gone two days, including travel, and I’m not losing more work time than if I served on
a U.S. board,” he says.
Not everybody has that much stamina, and even conference calls can be exhausting. Savio Tung, 56, a managing director at Investcorp International, a New York City global investment company, doesn’t mind the plane travel to Hong Kong for meetings of the Bank of China (Hong Kong) board, but the 2 a.m. phone calls with his counterparts in Asia are another matter. There is a 12-hour time difference between Hong Kong and New York, and he finds that “without face-to-face interaction, it’s harder to stay alert and be attentive. You never know who’s talking, and you’re always behind.” Those time changes can confuse in other ways too. When Paul Joskow, 60, president of the Alfred P. Sloan Foundation, was an economics professor at MIT, he was elected to the board of National Grid, Britain’s biggest utility. He’d sometimes be awakened at 3 a.m., only to hear an abashed English voice on the other end murmur, “Oops! I added instead of subtracted the time difference.”
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Savio Tung, 56, a managing director of the Bank of China (Hong Kong), says the time difference can make conference calls to Asia harder than going there. |
Directors who join a foreign board are in for some adjustments, obviously. Daniel Hesse was surprised to see that at the Nokia meetings, the chairman actually has a gavel. Directors aren’t encouraged to be confrontational—which is true in the U.S., of course, but even more so in the U.K. “We Brits are still pretty much reserved and would rather sit back than say publicly to some manager, ‘But why is your division going bankrupt?’” says Murray Steele, who runs the non-executive directors’ seminar program at Britain’s Cranfield University School of Management. Ronald Shaw, 69, chairman emeritus of Pilot Pen Corp. of America, joined the board of the Japanese parent company and found himself facing other challenges. “In early visits, I would lose my temper,” he recalls. “Why were the shipments of blue pens always delayed? By my fifth or sixth visit I started to slow down, take another cup of green tea, and stop stuffing myself down their throats.” Some foreign customs, of course, can just be ascribed to a nice way of doing things. As a woman at a formal board dinner in Europe, says Irene Miller, “you had better learn to pick up your knife and fork first, because no one else eats until you do.”
The board composition at foreign companies brings its own challenges. Most British companies have an independent chairman, for example, and inside directors are common throughout Europe. Both can take some getting used to, but the differences aren’t necessarily bad. As it turned out, Maria Richter, 53, a former investment banker at Morgan Stanley who, like Paul Joskow, was invited to join the board of National Grid, liked the custom of an independent chair. “He’s like a lead director, but with authority,” she says. And even having as many as six or seven of the CEO’s subordinates on the board has its advantages. “You get to know the senior managers very well,” says Joskow, who retired from the National Grid board in July. “You could discuss strategic issues at peer level without feeling like an outside director who was interfering. When things came up the board wasn’t surprised, and because I knew these people and had worked with them, I wasn’t hesitant to ask probing questions.”
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Instead of losing his temper, Ron Shaw, a director of the Japanese company that owns Pilot Pen Corp., learned to slow down and have another cup of green tea. |
An inside view of the role foreign companies play on the world stage adds enormously to what an American can bring back to fellow directors in the U.S. And there’s more. Sitting on the board of China Construction Bank feeds the visionary in Elaine La Roche, 58, CEO of Salisbury Pharmacy Group and former CEO of Morgan Stanley’s joint-venture investment bank in China, who joined the CCB board in 2005. “I’m fascinated with China,” she says. “In our lifetime there will be few other economies of the world that have developed as rapidly, or people who have gone through such enormous change. And to be a witness to this history and even a part of it, to contribute in a small way, is a life experience.”
Some of the perks can be nice too. Because BHP Billiton is providing the gold, silver, and bronze to be used in the medals that will be handed out at the Olympics, Gail de Planque and her fellow directors will be attending some of the events at the 2008 Summer Games in Beijing.
Interested in landing such a board seat for yourself? You don’t necessarily have to retire to attract the notice of a recruiter. Sometimes just being on a U.S. board is all it takes. “You get on the radar and the search firms find you,” says Maria Richter. She should know. She was on the board of the Western Electricity Coordinating Council, which promotes electrical-system reliability in the western U.S. and Canada, when a headhunter sought her out in 2003 to go on the board of National Grid.
