Themes from the 2011 Director's Dialogue: say on pay, proxy voting, whistle blowing, succession planning, board restructuring ... a riveting mix for leadership thinking.

• Author: Walkling, Ralph W.
• Position: EVIDENCE AND PERSPECTIVE - Conference notes

WE JUST FINISHED OUR 3rd annual Director's Dialogue at Drexel University. The Director's Dialogue is a small, highly interactive exchange of ideas among prominent CEOs and corporate directors. This year's event was co-chaired by Raj Gupta, former chairman and CEO of Rohm and Haas Corp., and Jack Brennan, chairman emeritus and senior advisor of The Vanguard Group.

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I can't possibly do justice to the program in this short column. I can't cover the dynamic dinner presentation by Conference Board CEO Jonathan Spector on societal challenges facing corporate leaders. Nor can I feature the substantive insights that Jack Krol, chairman of Delphi Automotive, shared as our luncheon keynoter on the board restructuring that he oversaw at Tyco, among other experiences during and after his leadership of DuPont Co. I don't have space to review two of the best panel discussions I've heard in recent years:

* Raj Gupta's session on succession planning, during which he reviewed his own experience at Rohm and Haas, and which also featured Jack Brennan and current Vanguard Chairman and CEO Bill McNabb III recapping the smooth succession they engineered at Vanguard;

* And Brennan's session on ownership from the perspective of a long-term shareholder, featuring Lewis Sanders of Sanders Capital, Kenneth Abrams of Wellington Capital, and Matthew Espe, president and CEO of Armstrong World Industries.

Finally, I cannot do justice to the wide range of insights, examples, ideas, and polite disagreements from our participants. Some of the concepts from these valuable sessions will eventually appear in this and other forums.

What I will do is highlight a few themes from a session that I co-chaired with Martha Clark Goss, a board member of American Water. The session was entitled "Lessons from the 2011 Proxy Season" and focused on say on pay and whistle blowing.

At the time of our dialogue, 20 Fortune 500 companies had reported voting results for say on pay. There are two key issues with regard to say on pay: the frequency of voting (annual, biannual or triennial) and the outcome of the votes themselves. While a majority of boards are recommending triennial votes, shareholders are overwhelmingly approving annual votes. A triennial vote makes sense in terms of efforts to reduce the administrative burden. However, an annual vote should enable companies to routinize the process, quickly detect particular problems, and better understand reasons for any...