Making corporate boards more effective

Krishna Pale, Guan Submarines and Walter Salmon. Synopsis Presented by: Brent Lengthener, Chairman and CEO of Lengthener & Associates, Consideration Member of TAP Oil & Gas and Merit. Participants: Consideration members from sundry organizations. Half of the bunch was made up of interpolitical representatives delay a hearty donation from Africa, Australia, the I-J and other destinations. This proved to be very thrilling in that their insights were from a unanalogous perspective throughout. Preface: This is Part 2 of my stationary n esss and following discovery performed from the week I elapsed delay Jay Lowers and a section of Harvard Calling School present members discussing consideration energy. I am perplexing to portion-out this notification to the best of my abilities so that others can perform concomitant insights for the companies they direct. Note, these are my stationary n esss but I do not necessarily coincide delay all of the comments and/or insights portion-outd. Also stationary n ess that these professors are all pro- seduceing and confident on considerations as polite-behaved. In Part 1, we ended delay Case Study 7-Bank of America and Merrill Lynch Case Study 8: Hewlett-Packard Company: The War Within This was a duration of Case Studies 5 and 6. In September 2006, Haps Consideration of Directors was in faint. The wages of Compact (Case Study 5) had enslaved a rate. Consideration members were leaking intimate notification and misdemeanor counts ensued. All of this peccable what seemed to be a powerful revolvearound for HP below Mark Hurt. Key Questions Included: 1. How and why did HP get into this plight? 2. What could keep been performed to bar this? 3. How do we bar this from happening to our considerations? Key Takeaways on Consideration Dysfunction Mistrust Poor Communication No penny team; too multifarious "lone rangers" No combinement on diplomacy No boundaries betwixt consideration inspection and skill deterrent Putting identical agenda's chief Independence. Integrity. Innovation. 2 Key Questions Included: 1 . Was Cancan Justified in assaulting Target? 2. Who would you policy delay? Cancan or Target? Why? 3. Could Target's consideration keep performed integralthing unanalogously to shun the social engagement this caused? 4. If Target can be assaulted, then what are the implications for other considerations, corporate governance, commissioner advance and aggravate regulatory inspection? Key takeaways: Economic downturns cause aggravate emphasis, in-particular delay investors. Rational judgeing an undeviatingly go out the door. Presently, judge encircling anyone playing in the Gulf of Mexico and how the emphasis has increased. Target is one hawk exit that does not solicitude-alarm Wall-Mart. They keep their own diplomacy and are very happy. They keep no yearn to be a copycat. They are boastful of who they are. The consideration is constantly "revamping" itself and is considered laudable in governance. Well-balanced delay all it had going for it, they stationary came below assault. Everyone is vulnerable- in-particular today delay the new varys. The nominating mode succeed behove ample aggravate gigantic going confident. Entity prompt is ALWAYS key. Concomitant Discussions: The day is coming when re-nominating considerations succeed be very gigantic. Investor Relations may insufficiency to unsavoryly portion-out what consideration members are doing, weigh releases, website, etc, enjoy they do delay skill. Companies should strain out to catholic and considerable portion-outholders from era-time. Conference seduces and portion-outholder meetings may insufficiency to be "rethought" so as to get aggravate interaction. Make comprehending the consideration you keep works polite-behaved-behaved as a team. When contingency hits, they insufficiency to see themselves as a team versus people. Case Study 1 1: FL-CIO Appointment of Investment and Home Depot On January 3, 2007, Home Depot fired Robert Narrated, its CEO and Chairman, followingcited quarrel aggravate his indemnification package. Marinade's disappearance was partially the development of the convergenceed attempts of the FL-Coo's Appointment of Investment. The appointment had performed a website and led an unsavory war convergenceed on his pay. Narrated made $240 favorite in 6 years, but the hoard had singly past down; well-balanced delay a 19% buy tail. Home Depot's sum one two-of-a-trade (Low's) was beating them at integral revolve, including watching its market cap go from $16 billion to $47 billion. Key Questions: 1 . How can a order market delay a convergenceed attempt enjoy this? 2. How did Marinade's indemnification collision Home Depot? Key Takeaways: There can be a spacious miscellany of unanalogous portion-outholder bunchs, all varying and all delay unanalogous, and possibly despite, agendas. It is gigantic to judge out indemnification plans from preface to end; not singly the costs, but the forced, the optics, and the fiction. Make comprehending you proactively recite the "penny fiction' in-reference-to indemnification versus letting someone else do it for you. Their comprehending can behove other peoples' substantiality. Error as ample as relishly delay deed unwandering indemnification versus unwandering remunerates. Keep plans belowstandable and unmixed. For aggravate good-natured-natured notification on laudable pay experiences, go to Case Study 4 (in Part 1) encircling Recruit Benchers PAL. Case Study 12: The Consideration of Directors at Morgan Stanley & Dean Witter On June 13, 2005, Phillip announced that he would retreat as Chairman and CEO at Morgan Stanley & Dean Witter as early as a legatee was set-up. Morgan Stanley & Dean Witter had been performing indisposed and was losing its key genius. His abandonment influential two deep problems for the consideration: 1 how to go encircling sentence a new CEO; and 2. How to particularize the coming inclination of the established. 6 Key Questions: 1 . What is your toll of how the consideration feeld the plight? 2. How do you clear-up their firmness? Terrific experiences were in situate and the order had behove "institutionalized" Consideration became infatuated delay a hearty CEO identicality or lost convergence A relishly legatee entity guaranteed the "CEO role" in five years is a terrific experience The consideration sacrificed the confidence and mission of the order for love and interlocks Most did not belowstand the seduceing, in-particular the gigantic discord betwixt Morgan Stanley and Dean Witter To transport the CEO, 75% of the consideration had to coincide, which was virtually imlikely The way they recognized the CEO to prompt any would-be legatee cut them off from some powerful candidates Case Study 13: Citreous-Wichita-Wells Fargo On October 3, 2008, the CEO of Citreous, who had Just worked out an esoteric coincidement to buy Wichita, ordinary a seduce from Washout's CEO declaration they had Just "cut a new market" delay Wells Fargo. Wells Farads extend was $7/portion-out versus the $1 Citreous had extended. The matchmaker was the IBID. They chief worked the market delay Citreous but posterior reworked a new market delay Wells Fargo. Even aggravate thrilling was new synod that was entity approved to let a beneficial bank buy another bank and use its Net Playing Loss directly. This, at the era, truly singly worked for Wells Fargo and is one of the reasons it could extend aggravate. 1 . If you were on Agitprop's consideration and heard there was a new market delay Wells Fargo, what would you do? 2. If you were on Washout's consideration, how would you feel the two opportunities? 3. If you were Wells Fargo, following the advantageous tax law vary, what would you do? 4. Evaluate what the IBID did by, in substance, brokering to twain. Www. Lengthener. M 7 5. Key takeaways: Interestingly, we had one of Washout's negotiators in the extent so he gave us some powerful insights: Citreous was going to "cherry-pick" Washout's goods and Wells Fargo was going to buy all. Citreous was not a cultural fit so chances that this would keep worked were rawboned at best. Plus, Citreous did not comprehend hawk enjoy Wells Fargo. Wichita believes Wells Fargo has been a "perfect fit. " The IBID Chair, Sheila Pair, brokered the market chief delay Citreous and then, during the due heed epoch, was agoing on a amend market delay Wells Fargo. From a allowable perspective: