NACD Conference comments

I have just left Washington where I spoke at the National Association of Corporate Directors annual conference: Future Proofing the Boardroom . 1000+ heavy hitters from the American business community attended. The hyper-partisan argument consuming the attention on Capital Hill meant the business of Government was never far from our minds. Several asked whether the rest of the world looks aghast at the maneuvering, posturing, and self-interest in America’s capital. Before I could answer they usually commented on the childish behavior of elected representatives.

The Conference theme was ‘future proofing’ and so there was much discussion around trends and transitions—mostly standard themes like volatility, globalisation, short termism, uncertainty, climate change, …

Some interesting points remain with me:

  • Clara Shih (Author The Facebook Era, CEO Hearsay Social, Director Starbucks) had a good insight about the emergence of a “collaborative economy” in which success and relationships are interconnected.
  • Lt Gen Michael D Rochelle (ret)  talked about “contextual intelligence”—the ability to see linkages between the proximate and the emerging (my words, not his) and grasp where this could take you. Shih jumped on this and described a young man in Nigeria (?) who discovered a way to generate energy by applying pressure to a crystal. Stick this technology in your shoe and it recharges your phone while you walk, overcoming the difficulty of recharging devices in an energy poor society where people walk a lot. Battery manufacturers watch out.
  • Michael Woodford, former CEO of Olympus, who discovered the Board was keeping him in the dark about a two billion dollar investment in what he called ‘Mickey Mouse’ companies, plus a $700 million fee paid to acquire another $2B public company. Woodford went to the regulators when he was fired by the Board for making an issue of this. Google the story, and watch out for the film.
  • Enjoyed a very stimulating workshop on crisis management by Judy Smith, on whom Olivia Pope and the hit series Scandal is based. Judy pointed out she values her Bar licence, and hence does not push the limits of the law, unlike Kerry Washington (the actress who plays Olivia) who has captured Smith’s intellect and mannerisms quite well. Nor has Smith had an affair with a President, but she did tell some wonderful stories about working closely with President Bush (snr). Among all her insights a couple stood out:
    • Know the message and the messenger. In a crisis you need to be clear what you are trying to say, and who the right person is to carry that message (don’t assume it’s the CEO).
    • The truth always come out.  It hurts your credibility if you are not immediately forthcoming
    • If you don’t get the truth out others will give meaning to both the matter and your decision not to tell
    • Pay attention to the little signals along the way—things don’t suddenly go bad. It often starts with 1-2 people being ignored.
    • Watch human dynamics around the Board table—many crises arise from conflict or distraction at this level

An overall trend observation I observe: the relationship between Board and management is becoming more adversarial, and will continue to do so as Directors protect themselves from onerous obligations. Hence Directors will operate more as examiners and inquisitors rather than wise counsel, severely limiting the ability of the CEO and management to bring their concerns, queries, and challenges to Directors—particularly when to do so may trigger a duty to disclose (or a future need to explain why this did not happen).

In this situation the role of an external confidant for the CEO—someone who can be that wise counsel—is ever more necessary. (Which naturally makes me very happy.)

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