The Way it was: 1996.

 
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On Our 20th Anniversary: A Salute

With this issue, DIRECTORS & BOARDS celebrates our 20th anniversary. The publication was founded during the era of the foreign corrupt practices hearings to serve as an adviser to boards of directors. Our advisory role expanded during the frenzied mergers and acquisitions era of the '80s, as our authors offered useful guidance on the strategic, financial, and legal issues emanating from the battles for corporate control. In the '90s, we retooled the journal to focus ever more diligently on those matters of greatest import to directors, including board composition.

For the past 20 years our intention has remained the same: to provide knowledge that enables a board to better govern a business enterprise. We want to both inform and motivate directors to perform with distinction their corporate governance role. The job of a director has become more demanding. To all our readers who have taken on the accountability of board membership, we at DIRECTORS & BOARDS salute you. Our special anniversary edition pays tribute to your courage and commitment.

Robert Rock, chairman and publisher in "A Salute to Directors" [Fall 1996].

I want to compliment you for the absolutely outstanding 20th Anniversary issue. From the standpoint of format, comment, content and substance, it is undoubtedly a landmark in corporate governance. You deserve a great deal of credit for having produced for 20 years now a first-rate publication. A quality such as found in DIRECTORS & BOARDS is no accident. It is the result of a lot of hard work, tough decisions and real commitment. Hearty congratulations!

A.A. Sommer Jr., Of Counsel, Morgan Lewis & Bockius LLP, Washington, D.C., in a letter to the editor.

A Model Board for the Coming Era

What, then, is the right board for the 21st century? I would simply offer the following model:

* A board that is highly independent of management but constructive in its relationship with management...

* understanding the difference between governance and management...

* comprising only one or two inside directors...

* with a "coordinating" director...

* and more members with competence in technology...

* slightly smaller than today...

* with substantial international participation...

* largely compensated via stock ownership...

* meeting less often face-to-face and more often in cyberspace...

* with a much greater participation of women and minorities...

* relying heavily on committees of the board...

* and communicating with shareholders by means other than annual meetings.

Norman Augustine, vice chairman and CEO of Lockheed Martin Corp., in "The 20th Century Company Meets the 21st Century Board" [Fall 1996], the keynote article of the 20th anniversary edition. He retired as chairman of the company in 1999.

A Director as CEO Successor

Asking a director to take over as chief executive has generally been regarded as an unusual, stop-gap measure. However, in recent years this situation has become more commonplace. There have been a significant number of instances where a director has been named as the permanent successor. In an ideal situation, the company will have a management team with enough bench strength from which to choose a successor when the chief executive retires or leaves for some other reason. However, not every company has done an outstanding job of succession planning, or there may be a crisis and the ideal is simply not possible.

Having one or more directors who are capable of serving as interim CEOs should be a high priority for a well-structured board. Having a highly qualified director serve as an interim chief executive gives a company the flexibility to consider a range of options and would allow the time...

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