Announcing a new board member: companies should treat the appointment of a new director as an opportunity to convey a strategic message to the market.

• Author: Culp, Ron
• Position: COMMUNICATIONS

GIVEN THE ongoing, increasing focus on corporate governance, new director appointments are important news. Often, companies communicate this news directly to shareholders and other stakeholders--employees, customers, the media--going beyond what's required in the Securities and Exchange Commission's Form 8-K. Why? A new director appointment may be an opportunity for a board to emphasize its enhanced independence (or accountability), reassure share-holders, or infuse the board with fresh, new thinking. Yet new board members typically want low-profile, low-risk exposure, particularly if they serve on multiple boards.

With that duality, directors must be used effectively and strategically in internal and external communications initiatives. A balanced approach can leverage and extend ongoing corporate communications and investor relations initiatives, while safeguarding a director's exposure to risk.

Initial determinants

A new board member announcement can be incorporated into external and internal communications vehicles. Which vehicles are selected depends on several factors, including:

* Backdrop: What is the context surrounding the new appointment? Is an outgoing board member being replaced? Is the board expanding in size?

* Existing Plan: What is the agreed-upon communications plan--including goals--for announcing the new director, and how will it be integrated into the existing communications program?

* Plan Approvals: Is the "vetting" process complete? Has the plan been reviewed and approved both by the company's public relations and investor relations staff and by their counterparts from the company where the director may hold a management position?

* Key Messages: What are the key messages the company wants to deliver with the appointment of this new director? Who are the key audiences? Which communication vehicles can best send those messages?

* Agendas: Is there a hidden agenda behind the announcement? For example, is the board attempting to talk to regulators by making the announcement? Or has the director requested the publicity? If the latter, what are the director's goals for media placements, and are they realistic?

* Media Audit: Has a media audit been conducted? Just as due diligence has been conducted during a new director selection process, it is important to conduct a quick scan of the media. If the newly appointed director recently appeared in an article on another subject, it will be more difficult to generate additional...