Much Appreciated Send-off.

• Author: Rock, Robert H.

Although there has been a lot written about how to off-board nonperforming directors, the bulk of director departures have continued to occur through the normal course of mandatory retirement or term limits. The majority of U.S. public companies have the former standard for retirement, but only a minority have the latter. Although most companies have instituted annual board appraisal processes, including individual director assessments, few have resulted in director firings. Boards are loath to single out one of their own, as evidenced by the scarcity of seats becoming available before terms are officially ended. Perhaps the recent institution of universal proxy voting may bring about greater director turnover.

Retirement at the end of long service remains the most common means of off-boarding. This spring, I personally experienced an off-hoarding that I found both imaginative and meaningful. After 27 years on the board of Quaker Houghton, my fellow director Don Caldwell and I had reached the mandatory retirement age. For our last board meeting, we joined Mike Barry and Andy Tometich, chairman and CEO, respectively, of Quaker Houghton, to ring the closing bell at the New York Stock Exchange (NYSE), which the company had done 25 years before when it was first listed. The Quaker board and top management spent the afternoon touring the exchange and the next day held the board meeting there. Don and I got to ring the bell, hammer the session closed and sign the log book. That evening, we were feted at a downtown restaurant where we heard tributes from our peers, received a framed board resolution attesting to our "dedicated and exceptional" board service, were each appointed "director emeritus" and were given a crystal vase emblazoned with our names, years of service and the Quaker logo. Don and I both were overwhelmed and very appreciative of the thoughtful and warm send-off.

When asked what advice I would give the board upon my departure after 27 years, I half-jokingly responded "term limits," a topic I will address more fully in a future D&B chairman's letter. Both age and term limits can be essential not just for a board's refreshment, but also for its revitalization. Boards must continually contain the necessary competence, commitment, character and courage to oversee management and govern the company. Board renewal is vital for sustained excellence.

For now, I would like to address the oft-overlooked topic of director retirement. Most...