3 Golden Quotes from the Latest Edition of Corporate Board Member

Corporate Board Member magazine

The latest issue of Corporate Board Member Magazine provides a slice of life when it comes to the challenges and topics on today’s board agendas. From reputation/crisis management and ESG disclosure to the paradigm shift in shareholder activism, the magazine takes a deep dive into a wide range of hot-button topics. We share three quotes and summaries from just a few of the articles in the Q3 2017 edition:

Corporate Board Member director onboarding

With new blood in the boardroom, better onboarding must become a priority.

According to Spencer Stuart’s 2016 Board Index, nearly one-third of all new S&P 500 directors were first-time board members (i.e., serving on their first outside corporate board). We also know from a recent episode with Julie Daum, Spencer Stuart’s North American Board Practice Leader, that the number of first-time directors is on an aggressive rise in 2017.

Boards are looking for first-time directors who demonstrate good judgement, intellectual agility, knowledge of technology or digital, and the ability to deal with complexity. [They] are prioritizing directors who are current and who are broader than one discipline and can think strategically as they confront new, ambiguous, and fast-changing marketplace challenges.
— Julie Daum, North American Board Practice Leader, Spencer Stuart

The reasons for bringing on new directors are many, the article explains: “…current directors aren’t taking on as many positions, fewer CEOs serve on one or more outside corporate boards, shareholders are looking for new blood, and changing expertise is needed in the boardrooms.”

As fresh faces enter the boardroom, more attention is finally being paid to director onboarding, an area of corporate governance that has been underserved for some time now. This article taps the counsel of various board members and governance professionals to understand what both tenured board members and first-time directors can do to ensure a smooth-as-possible acclimation process.

This issue was also central to our formation of Next Gen Board Leaders, a new community designed to highlight the value of younger (often first-time) directors and to improve the current recruiting and onboarding practices in today’s boardrooms.

» READ ARTICLE: Getting a Leg Up

Corporate Board Member TK Kerstetter

Perhaps you recognize a familiar face… This time, the questions are pointed at him.

We have to highlight our own TK Kerstetter, who was featured in this edition of Corporate Board Member Magazine.

In the Q&A article, Kerstetter shares his perspective on everything from shareholder communication to the biggest challenges facing today’s corporate boards. However, the article also takes on a very personal tone, as Kerstetter reflects on his last 30 years spent working with boards and on whether he’s made the kind of impact he hoped for.

I served on a public company board 25-plus years ago, but then was prohibited from doing so due to my employment relationships. When I retired from the New York Stock Exchange, I wanted to serve on a board [again] to see how effective a director I would make after all these years of helping boards. But interestingly, and this is an important point, I fall into a category often referred to as “male, pale, and stale.” In a way, the fact that we are talking about this topic openly is a testament to how hard I’ve worked to make boards more diverse…
— TK Kerstetter, Host of Inside America’s Boardrooms

Among other questions, Corporate Board Member also asks Kerstetter to roleplay: “If you were an activist and wanted to attack or discredit a board to win seats, what tactics would you employ?” We may be biased, but we think it’s a pretty good read…

» READ ARTICLE: Inside the Boardroom with TK Kerstetter

Meridian Compensation Partners

A record-setting year of say-on-pay approval puts boards at risk for complacency.

The 2017 proxy season saw a significant decline in say-on-pay failure rates, which was true for both the S&P 500 and the Russell 3000 (with 99.1% and 98.7% receiving majority shareholder support, respectively). While this was viewed as a big win across the board, it also poses a danger for any boards that are basking in their high approval numbers.

…when say-on-pay results are strong, I think there is a natural inclination to relax and take some comfort in knowing that the shareholders like the executive pay program…I think the trick is not to let that comfort turn into complacency. After all, the business circumstances that are present one year might not be the same the next year. So, while the “warts” of an executive pay program might get a free pass following a year of good performance, there could be a critical spotlight cast on those same warts following a year of poor performance.
— Charles Grace, Lead Consultant, Meridian Compensation Partners

In this article, Meridian Compensation PartnersCharles Grace highlights the trends and nuances in shareholder voting from one year to the next. He outlines several steps that boards can take to minimize risk and maintain a fresh perspective on their compensation plan.

» READ ARTICLE: Making Your Board More Effective

For more articles on shareholder activism, brand crisis prevention, and sustainability, check out the full Q3 2017 edition of Corporate Board Member Magazine. Click here for the table of contents.

Don’t miss our Board Evaluations Blog Series

board assessment part 3 screenshot

Our latest blog series is underway. We discuss the role of board evaluations in today’s boardrooms and why investors are devoting special attention to the evaluation process in 2017.

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