ALLOTTING THEIR TIME to accommodate a new directorship is never easy, but it's manageable, say three executives interviewed by DIRECTORS & BOARDS for this edition's Directors Roster. They describe a balancing act of fine tuning their time management skills and being very particular about what directorship opportunities they take on. That involves knowing what's happening with a company before joining its board, having some sense of what's expected in terms of travel, and carefully selecting prospective board offers where contributing won't become burdensome.
Joining the board of Cigna Corp. is Fred Hassan, chairman and CEO of Pharmacia Corp. He is also a director of Avon Corp. He is joining the Cigna board for the same reason he joined the Avon board in 1999 -- because it is undergoing a turnaround, something which he has successfully accomplished at Pharmacia since he joined the company in 1997. "If a company is going through a stage where its CEO is very hands-on in turning a company around, then that CEO has to focus his attention on the immediate issues," he says. Hassan states that only after he successfully "put his own house in order" that he branched out to pursue outside board opportunities.
"As an active CEO, I really have to watch my time allocations very carefully," he says. And for that reason, any board invitation must meet his own criteria before he signs on. The first step is determining whether he can learn from the board experience. "If there is no learning, then I'm not helping my own company," he says. Hence, his continuing interest in mastering the mechanics and dynamics of corporate transformation.
His second determination is how much time the new commitment will demand. "That comes down to whether the company is a leader and is doing well in its own industry," says Hassan. "If so, it's unlikely the company will put a big drain on the board' He adds, "My philosophy is that a board should be concerned with governance, not management. Therefore, you don't want a board that's overinvolved with managing the company.
Hassan also tries to limit his directorships to companies that are on the East Coast (Pharmacia's headquarters is outside New York City), and he avoids companies that might be subject to litigation that would "involve intense board involvement." And any prospective offer must pass muster with his own company's board. He says of the Cigna board invitation: "In this instance, the board felt that the ROI -- the benefit of the extra learning -- would be worth it."
Joining the board of Cell Therapeutics is Vartan Gregorian, CEO of the prestigious Carnegie Corp. of New York, a nonprofit organization that provides educational endowments. Since 1990 he has also served as a director of McGraw-Hill Inc. A self-professed workaholic, Gregorian begins each day at 5 a.m. "I've found that only busy people have time to do things' he says, "because they prioritize what they have to do."
Gregorian says he has always been reluctant to take on outside directorships. He emphatically believes that his primary allegiance and responsibility is to Carnegie: "You must do justice to what's entrusted to you:' So what is most important to him is to join a board where he can learn something, where he has an interest in the products or services that the company offers, and where the experience will be of benefit to his own organization.
Gregorian manages his commitments by sticking to a few simple self-imposed rules, which include: joining boards only when he can guarantee 100 percent board attendance; being familiar with the history of the company; knowing who the key management members are and their value systems; concentrating on assignments for each given day and never feeling bogged down with what's going to happen in the following week; and limiting his speaking engagements.
He offers yet another tip for dealing with verbose individuals: "When I was president of Brown University, people would always start to explain something, and would not quickly come to the point until later, when they would say, 'By the way....' So now I say, 'Let's start with by the way first."'
Joining the board of Nike Inc. is Jeanne Jackson, CEO of Walmart.com Inc., the online retail division of Wal-Mart Stores. She is also a director of McDonald's Corp. Jackson advises anyone considering a board invitation to know what travel demands that company may have, a lesson she says she learned the hard way.
It was only after joining the McDonald's board that she learned that it holds one board meeting overseas. "In that case, you're not talking about only two days for a board meeting, but more like three or four by the time you tack on the travel time." With McDonald's earning 40% of its revenue from its international operations, Jackson acknowledges that "It would almost be irresponsible for a board member to have never visited a McDonald's overseas, because you have no idea of the challenges that are faced by those managers.
Even domestic travel, says Jackson, who is based on the West Coast, can be onerous, particularly if you're crossing time zones. She also suggests finding out about dates of events other than board meetings, where director attendance may not be mandatory, but nonetheless expected. McDonald's, she notes, hosts an annual franchisee meeting -- a "huge event" held in Orlando or Las Vegas. "To be an effective board member, do you have to be at the big company meetings to see the CEO rallying the troops?" Jackson asks. The answer is obvious: "Sure. Despite the extra travel, it's a very good event for directors to attend."
New Directors October-December 2001 Companies adding new 121 directors Number of new directors 154 Category Number % of total Senior Officers 39 26% Chairman/CEOs 37 24 Finance 15 9 Not-for-Profit 15 9 Retired 12 8 Miscellaneous 12 8 Legal 10 7 Consultants 8 5 Academia 6 4 Total 154 100% No. of Women 32 20% SOURCE: SPENCERSTUART/DIRECTORS & BOARDS RELATED ARTICLE: Irwin Katsof For board service, enterprising telecom firm IDT Corp. puts in a call to a man with special connections. (Director spotlight)
IT BEGAN AS an ordinary day for Rabbi Irwin Katsof. His schedule was jam-packed. He had an early morning meeting with White House staffers to promote Words Can Heal, his new anti-slander campaign. Later that afternoon he was scheduled to attend his first board meeting with IDT Ventures Inc., a subsidiary of billion-dollar telecommunications company IDT Corp. Only the day would not be ordinary. It was September 11.
As he was preparing to leave a Washington hotel, his pager went off. It was his contact from the White House. He returned the call but got no answer. Then a message alert from CNN appeared on his computer screen: "Plane Hits World Trade Center." Turning on the television, he watched in horror as the second building was hit. Within the hour the Pentagon was attacked. With the nation's capital temporarily shut down, and his first board meeting with IDT postponed, Katsof rented a car and drove home. Like most Americans, the only thing left in his power was to pray, something that he has plenty of experience in doing.
While a rabbi is not your typical corporate director, Katsof is not your typical rabbi. "I happen to be a rabbi who happens to be very connected in the business world," he says.
Connected he is. A revered religious teacher, respected businessman, and best-selling author, he is the executive director of the Jerusalem Fund of Aish Ha-Torah, an international Jewish educational outreach organization. There his responsibilities include creating new programs such as Words Can Heal, a national campaign with a mission to eradicate gossip and verbal violence (www.wordscanheal.org). It has attracted a who's who of Hollywood endorsers such as Goldie Hawn, Tom Cruise, and Bette Midler who serve on its board of advisers.
Katsof's connections extend to the country's leading politicians and business executives. Senators Joseph Lieberman and John McCain, along with Jack Kemp, are honorary chairpersons. Chief executives Alan Hassenfeld of Hasbro Inc., Peter Coors of Coors Brewing Co., and Henry Cisneros of American City Vista are also among the staunch supporters of his programs.
In addition, through the Jerusalem Fund, Katsof has brought many U.S. business and political leaders on trips to Israel to explore high-tech ventures and to promote good relations between America and Israel. Executives who have joined him in the past include Lennert Leader, president of AOL Investments, Andrew Neff, senior managing director of Bear Sterns, and Henry Kissinger. Former Israeli Prime Minister Benjamin Netanyahu, Lady Margaret Thatcher, and Delaware Sen. Joseph Biden Jr. have also made the trip to Israel and endorsed his programs. And he has been responsible for bringing some well-known Jewish people back to their roots. Actors such as Elliot Gould, Jason Alexander, and Kirk Douglas are just a few he has inspired.
IDT was founded by current chairman Howard Jonas in 1990, who has guided it from a start-up to a billion-dollar business in the course of 10 years. In November 2001 IDT Ventures, a subsidiary which was formed to identify promising media-related investment opportunities, acquired Talk America Radio Network, a syndicate with more than 600 radio stations, and will relocate the operation from Las Vegas to facilities now being constructed at IDT's headquarters in Newark, N.J. In December, IDT acquired Winstar Communications Inc., a provider of phone and data services that entered bankruptcy proceedings, for $43 million. There are also facilities in place and plans for cable broadcasting in the future.
Katsof's IDT appointment seems like a natural fit. Katsof and Jonas have similar principles. Both believe in high ethical business standards, and are committed to socially responsible causes: Katsof through his work at the Jerusalem Fund, and Jonas with his service on 20 charitable...