BEST PRACTICES, or best people? What is most crucial to corporate governance?
It is both, of course. But for this 35th anniversary edition of DIRECTORS & BOARDS, we are going with a special focus on the people who are making--and have made--good things happen in the boardroom for shareholders and stakeholders alike.
You won't find much in this special edition on Sarbanes-Oxley or Dodd-Frank. Or, going even further back in history, the Foreign Corrupt Practices Act, which was becoming law when DIRECTORS & BOARDS was founded in 1976 ... and, indeed, provided an impetus for launching this journal (back when corporate governance was not yet a term in the common lexicon). What you will find is a major focus on the human element in governance. We start with Norman Augustine's review of "What I Think I Learned!" (page 18), continuing with Ronald Naples and his questioning of "Governance for Governance's Sake?" (page 26), and now as you turn to the balance of the issue, you are in for a deep immersion in the people side of what makes for a good director and a good boardroom. Here is what is ahead:
* Tributes to a 'Giant in the Boardroom' (pages 31-43): We turned to a network of colleagues--including some past authors and newer acquaintances--to write a brief essay about someone who has been an inspirational force for them in their work on and with boards. Through their reflections, the human dimension of governance is given deserved recognition and respect. (Also in this spirit is Leo Hindery's column on page 10.) And while we are on the subject of inspirational forces, I hope you enjoy our sidebar tribute to an organization that is also marking a noteworthy anniversary--the Girl Scouts of the USA. The "original women's leadership pipeline," as our authors call the Girl Scouts, is celebrating its 100th year (see pages 40-41).
* Editor's Choice (pages 44-57): In my years as editor, I have published thousands of authors. This may have been my most imposing editing job ever to select this tiny sample of "35 of the greats"--the authors and their articles and nuggets of governance wisdom that are emblematic of the thought leadership that has advanced the practice of corporate governance for these 35 years. (And, oh, what rich material was left on the cutting room floor.)
* 'Covering' the Boardroom (pages 58-60): Another opportunity to demonstrate the people factor in governance is with this display of CEOs, directors, and other leading figures in governance who have graced the covers of the journal over its history.
* Director Recruiting 'From the Archives' (pages 71-94): Sprinkled throughout this edition's Directors Roster is a selection of authors who have addressed with a particularly expert touch the issue of board recruitment. As you will see, this has been a primary topic for the journal since its earliest days. You can't get much more people-focused than when you are talking about the right stuff to be a director.
* Endnote on Keith Louden (page 96): He was the director's director, and we bring to a fitting close our 35th anniversary issue with a few of his prime governance principles.
So, best practices? Yes. Best people? Absolutely! We offer this tribute to all those, present and past, who have brought intellect, sound judgment, leadership ability, ethical character, and courage to their board involvements.
Rick Goings on
David R. Parker
A 'play to win' presiding director
When Tupperware Brands Chairman and CEO Rick Goings sat down with Directors & Boards for a cover story interview two years ago ["Rick Goings: 'We've Got an Incredible Board,' " Second Quarter 2009], he was enthusiastically forthcoming in naming every member of the board and offering a keen comment on the value and capabilities each director brought to the board. Here, for this tribute to an outstanding individual in governance, Goings spotlights his board's presiding director, David R. Parker.--James Kristie
"You complete me." Okay, okay ... I know. It's Tom Cruise's line to Renee Zellweger in "Jerry Maguire." Yet, in my view, it describes the kind of relationship between a presiding director or chairman and the corporation's CEO. In a very real sense this relationship can set the tone for how the board and management work together.
David Parker, Tupperware Brands' presiding director, has set a standard for the firm's most senior nonexecutive director.
David is a product of the University of Texas and Harvard Business School. His business career has included consulting at Boston Consulting Group, as well as senior officer positions at American Can Co. (Primerica), Ryder System, and ProSource, where he was chairman and CEO. Today he is chief operating officer of The Archstone Partnerships, a fund of funds based in New York City.
I first got to know David 20 years ago when we both served as directors of Tupperware's former parent company, Premark International. In 1996, when Tupperware was spun off as a public company, David was an early draft choice to join the newly formed Tupperware board.
David's deep and varied business experience has made him multidimensional with a global perspective. The right balance of "play to win" courage tempered by "play not to lose" pragmatism has influenced Tupperware Brands' management team to move forward with a feeling of confidence and support.
He appreciates that, at its essence, a company is just a loose collection of people. The company that creates an operating landscape which attracts, develops, and empowers the best people wins! David believes this, as I do, and has brought the board and management together to develop this type of environment at Tupperware Brands.
Reflecting on what makes David such a standout--
* He's both a mentor and a business partner. The foundation for both is trust.
* He is intellectually invested in Tupperware Brands' strategy, and as a result sees far beyond near-term performance.
* He knows how to run a meeting. Because he's smart and experienced, he moves the agenda briskly forward, knowing what's most important and what is not. When there is a need for an "unexpected" fast-track process, he is gazelle-like.
* He knows how to create and maintain a positive board culture. While friction has been almost nonexistent on the Tupperware Brands board, there are at times differences of opinions. He creates a collaborative environment that allows these to be aired without contaminating the collegiality.
* David's most significant contribution to Tupperware Brands, however, is his belief that the most important function of a board is ensuring the sustainability of the business. Sure, that includes all the Sarbanes-Oxley, GAAP and SEC compliance requirements--but none of these really matter much without a healthy, growing business.
So, yeah ... "you complete me" worked for Tom Cruise, and it works for me.
Bruce Ellig on
'He lived by a three-point principle'
As you would expect from someone who is the author of The Complete Guide to Executive Compensation [McGraw-Hill], Bruce Ellig is a top expert in the field of exec comp. He has written a number of authoritative advisories over the years for DIRECTORS & BOARDS on executive and board pay. But back in 1997 he stepped away from the compensation trenches for a bit to compose a distinctive article, "My Years With the Pfizer Board." He knew his subject well--Ellig retired from Pfizer in 1996 after serving the company for over 36 years, the last 12 as worldwide head of human resources, reporting to the chairman and CEO. Here he remembers fondly a former Pfizer leader.--J.K.
THE LATE Edmund T. Pratt Jr. served as chairman and CEO of Pfizer for 20 years, retiring in 1992. (He died in 2002.) During that period revenue increased seven-fold.
I was secretary to the board's executive compensation committee and had on a number of occasions been present at board meetings, either as a presenter (heading up worldwide human resources reporting directly to Pratt) or a supporter of a presenter. These sessions gave me numerous opportunities to see Pratt's leadership of Pfizer's board of directors.
He was a director of Chase Manhattan Bank, General Motors, and International Paper. He stated he would not sit on a board unless he believed it would make him a more effective CEO and board chairman. There was no question it broadened his base of business knowledge, which he demonstrated at the Pfizer board meetings.
During board meetings, Pratt was an intent listener, encouraging the discussion of different views and alternatives. His personal characteristics of honesty and integrity, combined with a straightforward approach in every discussion, provided the board with an important frame of reference. Delicate issues were hit head on, often identified...