September 2014

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Dear ,

Are you a board member? Is your organization directed by a board of directors or board of advisors? Or, are you looking to establish a board for your organization?

A report by the Plunkett Foundation, an organization dedicated to growing businesses and enriching communities, recommends that leaders "recognize that the success of any business ultimately depends upon the capacity of its directors to provide the vision and direction needed not only to survive, but to develop and prosper. Therefore, make a commitment to develop the capacity of the board of directors to improve both their personal and collective contributions to the overall development of the business."

Below, we share a book review for Back to the Drawing Board: Designing Corporate Boards for a Complex World, in which authors Colin B. Carter and Jay W. Lorsch highlight qualities of an effective board and offer practical advice for improving corporate governance.

For board members interested in becoming more effective directors and advisors, and for those interested in tools to improve their board, the Anderson Center's Governance Forum is scheduled for October 7-9 at Madden's in Brainerd, Minn. Learn more about the program in our Forum Spotlight below.

Feel free to contact Venita Wilkes, Forum Director, at 320.251.5420 or venita@anderson-center.org, with questions on forums or for assistance in planning management and leadership development activities for your organization.

Best regards,
The Anderson Center Team
 

Back to the Drawing Board: Designing Corporate Boards for a Complex World
By Colin B. Carter & Jay W. Lorsch

Review by Lissa Broome,
UNC School of Law


Authors Carter and Lorsch push beyond structural devices to improve corporate governance - such as increasing the percentage of independent directors, reducing the number of boards on which each director serves, and electing a board chairman other than the CEO - to discuss the imperative for boards to define their roles in the light of the needs and circumstances of their companies. The authors suggest that the factors most likely to make a board effective are "the dedication, energy, time commitment, and skills of the directors, the quality of their information, the leadership of board discussions, and the level of openness, transparency, and trust in the relationships among directors and top managers."(p. 36)

The authors note that in selecting new board members, boards should

  • Raise the performance bar though periodic assessments of current directors,
  • Insist on an education process for new directors,
  • Widen the talent pool beyond CEOs by considering businesses or professions where women or minorities are well represented,
  • Think strategically about the skill mix, and
  • Be realistic about compensation. (pp. 114-15)

They describe six essential characteristics of each director:

  • Intellectual capacity,
  • Interpersonal skills,
  • Instinct,
  • Interest,
  • A commitment to contribute, and
  • Integrity. (pp. 116-17)

The authors urge that these characteristics are more important than whether the director is a CEO, noting that most CEOs argue that CEOs make the best directors, while most non-CEOs argue the opposite. (p. 116) The authors note that boards generally have very little gender or ethnic diversity, but warn against tokenism, arguing that each board seat is precious and that each director should possess the six minimum attributes listed above. (p. 123) The authors note that the shortage of women and minorities is the "logical outcome of the view that the only good directors are CEOs and ex-CEOs - and we note that 99 percent of the CEOs of S&P 500 companies in 2002 were male," but that "[t]here is room on a good board for directors who haven't been CEOs, and a logical step is to look to those business professions where women and minorities are already well represented." (p. 123)
 

The Governance Forum is designed for members of boards of directors (and boards of trustees or boards of advisors), as a vehicle for improving the performance and effectiveness of individual directors and boards as a whole. The three-day forum is a comprehensive program that assists individuals in assessing their key knowledge, skills and abilities, and forming a plan for their own development, and the development of their board.

Governance Forum
October 7-9, 2014
Madden's on Gull Lake
Brainerd, Minn.

Learn more about the Governance Forum, including the forum's objectives, Discussion Leaders and the opportunity to earn 16.5 Continuing Professional Education credits here.

 

 

 


Visit
www.anderson-center.org to learn more about, and register for, upcoming forums.

Managers' Forum
September 8-12, 2014, at Madden's in Brainerd
LEAD 2014
September 10, 2014, at CSB in St. Joseph
Speakers Forum
September 11, 2014, at River's Edge in St. Cloud
Leadership Forum
September 22-24, 2014, at Madden's in Brainerd
Governance Forum
October 7-9, 2014, at Madden's in Brainerd
Roundtable Annual Retreat
October 23-24, 2014, at Madden's in Brainerd
7 Habits for Managers Forum
November 4-6, 2014, at Madden's in Brainerd
Leading Change Forum
November 17-19, 2014, at Le St-Germain, St. Cloud
Speakers Forum
January 22, 2015, at River's Edge in St. Cloud
Operations Forum
January 26-28, 2015, at River's Edge in St. Cloud
Executive Forum (Week 1 of 3)
February 8-13, 2015, Venue TBD
Strategy Forum
February 8-13, 2015, Venue TBD


Click here for more information about upcoming speakers. To reserve a table or seat for the event, contact Sydney Andringa at 320.251.5420 or sydney@anderson-center.org.


Learn more about upcoming forums:

See the 2014-2015 Forum Calendar for more information.

To learn more about the Anderson Center and our forums, visit our website or contact Venita Wilkes at 320.251.5420 or venita@anderson-center.org.


"Growing other leaders
from the ranks
isn't just the duty of the leader,
it's an obligation."

Warren Bennis

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