Enhancing board communications.

• Author: Smith, A.J.C.
• Position: Corporate boards

The Chairman's Advisory Committee on Strategy helps achieve an unconstrained dialogue and maximizes the relationship, with the outside directors.

After years of scrutiny, confrontation, and often strident debate, a consensus appears to be emerging around a broad, conceptual definition of sound governance: namely -- a structure and process that:

* Ensures the best interests of shareholders are made clear.

* Helps achieve and maintain the competitiveness of the corporation in order to produce acceptable returns to owners.

* Contributes to the successful perpetuation of the enterprise.

The most popular models of "good governance" share vital elements, specifically:

* A means for achieving mutual understanding of the goals, strategy, and operating imperatives of the corporation.

* A commonality (or at least convergence) of interest among shareholders, employees, management, and directors -- often reinforced through the bond of stock ownership.

* The opportunity for informed and frank dialogue between senior management and outside directors.

Special communications challenges are presented when the company, in addition to being publicly held, is also a professional services firm of global proportions -- and a highly decentralized one. Such is the case with Marsh & McLennan Companies.

Marsh & McLennan Companies is a professional services firm with revenues of more than 83 billion, 25,000 employees worldwide, and five independently managed businesses providing advice and transactional capabilities to clients in more than 80 countries.

We are a decentralized company. We operate in a culture and professional environment that are meant to encourage responsibility, open dialogue, creativity, and flexibility -- an organization climate that fosters prompt, effective responses to our clients' changing needs.

As a public company since 1962, we are something of an anomaly. The firms that most resemble us in the nature of their businesses and people -- consulting, law, and accounting firms -- are virtually all in the private sector.

With so many (nearly 75%) of our U.S.-based employees as shareholders, and with some 45 senior managers designated as members of the company's "partners group," we tend to be viewed, and to view ourselves, as a hybrid: both professional partnership and public company. In this context, the CEO role is more akin to the senior partner of a large, private professional services firm than to the chairman of a pyramidically structured...