At Methode Electronics: Technology expertise on the board once was weak, but that changed.

Author:Kane, Karen

Methode Electronics Inc. is the story of a board that helped move the company from supplier to innovator by making technology expertise a priority. It is also the story of what it takes to create a strategic board in today's environment.

It starts with the right people--a core of experienced executives who have a history of making good decisions, have the interpersonal skills that thrive in a team environment, and make the most of the group dynamics.

When William J. McGlinley, CEO/founder of Methode, died suddenly in 2001, board members asked Warren Batts to join them to help with governance. It was a smart move. Over a period of two decades, Batts led a number of large companies, including Tupperware Corp., Premark International, Dart & Kraft, Dart Industries, Mead Corp., and Triangle Corp. He served on the boards of Allstate, Sears Roebuck, Sprint, Cooper Industries, Harte Hanks Communications, Temple Inland, and International Minerals and Chemicals. And he teaches corporate governance at the University of Chicago Booth School of Business.

An experienced board member, Batts advises: Beware of the unexpected when you join a board. He joined the Methode board following conversations with the shareholding family who said they'd never sell the company. At his first board meeting, a family member announced the sale of the company, creating a host of issues for the board, including shareholder lawsuits. One group of shareholders charged that the board had sold too cheaply; another group argued the board demanded too high a price.

Technology expertise on the board was weak in early 2000 when Batts first joined the board. An equipment supplier to the automobile industry, Methode manufactured and sold fully mature products that were becoming commoditized. Continuing along that path would have spelled trouble. Fast forward a decade and a half, Methode Electronics is an innovator in developing and making electronic devices that make cars safer and run better.

At Methode, it is rocket science. "Methode is in the business of doing things that have never been done before, bringing new products to market," says Batts. "Think about the product liability if that product doesn't work. The average car on the road today is 11 years old--that's the average! When you translate that into electronic components that will be installed in automobiles, it becomes a product that has to last 15 years. That's really a demanding challenge to meet when you have something...

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