BOARD LEVEL LESSONS FROM HP, BP AND AIG: CRISIS CONTROL, THE CEO AND GOVNERNANCE
Boards of directors are often confronted with crises. Knowing how to respond to and manage through these high-tension events is becoming a core board competence. This session refers to the challenges faced by directors at HP (in connection with the decision to terminate Mark Hurd as CEO), BP (in connection with the Gulf oil spill and subsequent management changes), and AIG (in connection with losses incurred during the financial crisis and the subsequent bailout) as reference points that contain valuable lessons for all directors of publicly traded firms. This session will review steps that boards can implement to prepare for such crises, common boardroom and management mistakes that can make bad situations worse, strategies for addressing the litigation and public relations challenges generated by these crises, and approaches for dealing with governmental inquiries. The session will also offer constructive “post-mortems” of boardroom response at HP, BP, and AIG.
WHAT BOARDS CAN LEARN FROM THE MILITARY
Retired military officers have a unique background: they’ve been trained in leadership roles, they’re accustomed to decision making in high-pressure environments, and they’re experienced in giving, as well as following, orders. This panel will explore what lessons can be transported from the battlefield to the boardroom, and what today’s directors can learn from the military.
BOARD DIVERSITY AND COMPOSITION: HIRING, FIRING, AND EVALUATING DIRECTORS
Filling the boardroom is becoming an increasingly difficult challenge. Shareholders are demanding greater input into the decision as to who gets nominated to serve on corporate boards. Majority vote standards create difficulties when shareholders withhold a significant number of votes for any director, even if the director gains a majority. CEOs, CFOs, and other senior corporate executives are cutting back on the number of boards on which they serve because of the time commitments inherent in board service and the need to focus on their primary corporate responsibilities. Thus, just as the demand for additional directors is expanding, a major traditional source of directorial supply is drying up. In addition, there is substantial support for measures designed to increase the number of women and minorities sitting on corporate boards: Norway has legislation requiring that at least 40% of directors of publicly traded firms be women, and in Britain, Lord Davies has recommended that all FTSE 100 boards be composed of at least 25% women by 2015. This session takes a pragmatic look at the challenges of board composition, hiring, compensation, and retention, and offers strategies that can help boards balance the multiple competing considerations that can influence the board composition decision.
RIPPED FROM THE HEADLINES