I believe that there are times when the board needs a voice. They include the resignation, retirement, or incapacity of the CEO, at the conclusion of a proxy fight, or at the end of a special board investigation or regulatory settlement. Every situation is different and the board needs to make a case-by-case decision as to whether a public statement is appropriate.
When a public statement from the board is desirable, then who does speak for the board? The board will be better prepared for these moments if it discusses communication tactics in advance, including who should act as its spokesperson. In my view, the nonexecutive chairman or lead director is the natural candidate to speak for the board. That individual should not speak, however, unless the board agrees that a public statement is desirable, concurs on the substance of the message, and is comfortable that its spokesperson has the communication skills to convey the right tone and message. Under some circumstances, prior legal review of the message might be prudent. In all circumstances, senior management should be informed in advance.
Apart from broad public communication to all stakeholders, are there other occasions when the board should speak? For example, how should boards respond to major institutional shareholders who request a meeting with one or more representatives of the board?
In my experience, most directors are strongly opposed to communicating directly with individual shareholders, largely out of concern about inadvertent violation of the laws governing fair disclosure. Despite this concern, one of my boards offered to meet a few months ago with a large, long-standing...